ON Thursday, March 1, the Philippine Development Foundation (PhilDev),
along with its partner organizations, hosted “A Fireside Chat with Fil-Am
Thought Leaders” at the Shade Hotel in Manhattan Beach, CA.
PhilDev (formerly Ayala Foundation USA) is a public charity registered
with the United States Internal Revenue Service as a 501 (c)3 tax-exempt
organization.
The organization is focused “on
building an ecosystem of science and technology-based entrepreneurship and
innovation for social and economic development in the Philippines. As part of
their commitment to diaspora philanthropy, they also generate resources from
US-based donors for non-profit organizations in the Philippines.”
Envisioning “globally-competitive technology products and services from
the Philippines driven by innovative entrepreneurs focused on growth and job
creation,” PhilDev “strives for a sustainable and globally-competitive
Philippine economy by developing programs and supporting partnership
initiatives in science, technology, innovation and entrepreneurship.”
According to PhilDev board member and Vice President for Business
Object Catherine Buan Peterson, PhilDev is the “bridge of hope across the seas
for decades.”
The open discussion centered on the “State of the Global Filipino
Community and Opportunities for Collaborative Pursuit for the Economic
Improvement of All Filipinos Anywhere.”
The speakers for the momentous event included: Dado Banatao (Managing
Partner, Tallwood Ventures,Inc.); Tony Alvarez II (Co-Chief Executive Officer,
Alvarez and Marsal); Winston Damarillo (CEO/Board Chair G21X) and Melany De La
Cruz-Viesca (Assistant Director of the UCLA Asian American Studies Center and
the Managing Editor of AAPI Nexus).
Some of PhilDev’s board of trustees and officers were also introduced:
Gail Alvarez, Cora Oriel, Eric Manlunas, Dado Banatao, Josie Chernoff, Sherri
Burke, and Lynn Hess.
The four pillars of economic development
The discussion began with this opening salvo: “For economic development
to happen in developing countries, there must be four pillars: Science,
Engineering, Technology and Innovation.”
The panel pointed out the examples set by Ireland, Israel, Chile and
Rwanda. According to them, what is common among the attendees “is that everyone
here wants to help the Philippines and has given their time and donation.”
Strategic philanthropy was deemed as a “long-term solution to alleviate
poverty, to do something sustainable, to build businesses and enterprises with
science and technology, to produce commodities with high value.”
The panel described a concept called “ Next 11.“
According to Goldman Sachs, the next 11 countries that will experience
Economic Renaissance include the Philippines, Mexico, Nigeria, Egypt, Turkey,
Iran, Pakistan, BanglaDesh, Indonesia, Vietnam, South Korea, Brazil, Russia,
India and China.
Over and over, the panel emphasized the high quality of workers in the
Philippines.
Indicators of
economic growth
Tony Alvarez said that this prediction of an economic renaissance is
very real, pointing to indicators of economic growth in the Philippines:
Remittances sent by Overseas Filipino Workers, amounting to $20 billion a year,
has increased by 7% despite the recession; an inward rate of growth has also
been observed, despite problems in the government.
However, according to Alvarez, the problem doesn’t just lie with the
government but with the monopolization of businesses by the rich. There is a
need to infuse new blood into the entrepreneurial class.
Alvarez said that it is hard to beat a system where “you have a rich
class that is not just churning that much, and you have a rich class that are
likewise entrenched to be in government. Yes, Filipinos are damn good workers,
and when you outsourced, given the companies’ BPOs (business process
outsourcing) I have worked with, there are many impediments to situating the
businesses out there, a lot of forces prevent opportunities to the country.”
Venture capitalism
requires optimism
On the topic of remittances, Eric Manlunas asked: “Is the $20-25
billion remittances a year, a mirage for creating consumers, and not creating
stuff, and therefore delaying the progress in the Philippines? For the overseas
workers to have to leave to earn a living, they do not feel like heroes, they
feel like refugees. ”
Dado Banatao said that in order for one to become a venture capitalist,
he must first be an optimist. “If we can convince owners of remittances
institutions to invest in the Philippines, we can hopefully end poverty. When
you have corruption as a habit, [instead] of using remittances to help
families, progress can be in place for [the] creator of BPO businesses, that is
the one that creates value. Once you are at the status of developed vs.
developing countries, assuming basic necessities of life are utilized, then it
can go to savings and understand where that goes to – and that can be used for
investments.”
How can we help
the Philippines?
To address this question, each of the panelists described the genesis
of their success.
Dado is an engineer and his engineering aptitude led him to discoveries
and self-confidence. He said that for every ten projects worked on by an
engineer, only one succeeds. “That made me who I am today, I outworked others
and I got lucky.”
Tony Alvarez said: “I like what I do and I like who I do it with and
money is a consequence of passionate work. Your destiny is you.”
He described the 1,700 employees who are working around the globe for
Alvarez and Marsal.
According to their website, the private consulting company’s expertise
include automotive, energy, financial services, healthcare, high tech,
manufacturing, media and entertainment, consumer-packaged goods, private equity
services, public sector, real estate, retail and transportation and airlines.
Alvarez believes that we can be game-changers -- impactful. We can
choose a narrow focus, but go deep in applying change.
“When we do bits and pieces, we lose power. We have to find a way of
consolidating our strength and do it right!,” he said.
Based on Goldman Sachs prediction that the Philippines will be one of
the 11 countries that will drive global growth in less than 4 years, Winston
Damarillo believes that the country has great potential for an economic
renaissance.
He has looked at the gross domestic product (GDP) and cash inflow in
the Philippines.
“If we can turn that around, $20 to 25 billion remittances to produce
products, then that can generate a $3-trillion economy to the Philippines and a
$20,000 income for each family, with 30 years of compounded growth. This makes
the Philippines an extremely exciting and probable source of economic
renaissance,” he said.
Paradigm shift
Eric Manlunas asked how a paradigm shift from consumption of goods, to
technology in production can be made.
“Are we just accountants [or] health care workers? [Are there] not
enough tech people to have intellectual property rights?”
Dado Banatao acknowledged the Philippines ability to produce technology
but was quick to add that “we are way behind. Once we acquire it, it becomes
obsolete in 3 to 4 years. We do not have the ability to sustain it with home
grown expertise, whether imported or self-generated within.”
He then related the story of a scientist (a consultant to the US
government), who encouraged investment in research and development, which
brought the first man on the moon.
From that, came many development of microelectronics, and billions and
billions of industry growth.
What he proposes is not unlike a trend that is called impact investing
or triple bottom line investing, which is described in Abundance (a book by
Peter Diamandis and Steven Kotler) where the research group, Monitor Group
described: “what was $50 billion in impact investments in 2009 is on pace to
reach $500 billion within the decade.” The so called “techno-philanthropists
bring not just the check, but also the human capital: networks, business
connections, the ability to get high-level meetings.”
The importance of
education
Melany Delacruz-Viesca pointed to the examples of Vietnam, India and
China, where governmental policies helped changed the economic landscape and
propelled the emigration of engineers from the United States back to their home
countries.
But, first, there has to be a manufacturing base set up where these
engineers can work and merge their talents. Such was the case in India and
China, according to Tony Alvarez. There was a strategy there within the
institutions, whereas the Philippines has the worst educational system in Asia.
Delacruz – Viesca described that even in the US, there is not enough
interest in higher education among Filipinos with only 7 percent ; Taiwanese
have it at 38 percent; Asian Indians at 35 percent and the Chinese at 20
percent. The result is a shortage of mentorship in the pipeline programs.
How do we then retain the brightest and the best scientists to stay in
the Philippines and help out?
The panel said that the answer lies in sparking the entrepreneurial
spirit among these science graduates.
When there is a strong manufacturing base, that could be co-developed
with other scientists -- like in China, India and Vietnam, that could be part
of the global supply chain, then, the Philippines can also be a biggest
component of growth, based on the technology dream and 80 to 90 million lives
can be improved.
Graft and
Corruption 101
Tony Alvarez said that “the reason we are not building plants there [in
the Philippines] is that we are 50% energy supplied,” and that “entrepreneurs
are not taking the risks.”
He suggested a course in the schools and universities on graft and
corruption 101, he even offered to teach the course.
Why? The biggest disincentive in business investment is changing the
rules midstream. It doubles the costs of doing business.
He suggested that those who came in first, should be grandfathered, and
those who came in later, can be part of the new rule-making.
Conclusion
The ‘fireside chat panel’ mentioned the explosion of growth in Rwanda,
once the site of thousands and thousands of lives lost to violence. It now
includes a new soy processing plant and expansion of coffee roasting
businesses. It took a public-private partnership, including the government of
Rwanda and the Clinton Hunter Development Initiative within the Clinton
Foundation, to realize this growth explosion in just a few years.
Perhaps these techno-philanthropists can propel specific industry
catalysts for growth, namely: Solar production of energy, and Safe Production
of foods, and with energy sources reliably secured with reliable food sources
and sources of drinking water, businesses can be multiplied, jobs created
towards a greater level of quality of life.
PROSY ABARQUEZ DELACRUZ
(www.asianjournal.com)
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