Trotsky's Children: The Philippines

I just got back from a two week visit to the Philippines. Most of my time was spent in and near Metro Manila, but we did do some island hopping--to Cebu, Bohol, and Dumaguete.

My first visit to the country was in 1988, and the last time I was there was 1995. So it's been 24 years--and gosh, the country sure has changed! It's much richer than before.

Manila traffic is still awful, but it's not as bad as I recall from my previous trips. They have expanded rail transit significantly. Just as important, they have built out the expressway and toll road system around Manila. The famous boulevard--Epifanio de los Santos Avenue, known universally by its initials, EDSA--has been converted to a full-fledged expressway. That cuts the heart out of the city, but it has hugely improved traffic flow.

EDSA, you may recall, was the site of the mass demonstrations that overthrew the Marcos dictatorship in 1986. The date, February 25th, is celebrated as Revolution Day and is a national holiday. EDSA today could not host such an event--it would be like holding a mass rally on the Dan Ryan Expressway. I'm not real clear where a revolution today might happen. Rizal Park? Triangle Park in Makati? Roxas Blvd? I'd vote for the latter.

Manila used to be very polluted--everybody wore face masks. I'd end each day with my nose, eyes and ears filled with diesel dust. Today this is much improved, largely because the country is gradually banning the diesel-burning, smoke-spewing jeepneys. These iconic vehicles are being replaced by less attractive but much cleaner, gasoline powered minibuses.

Filipino Jeepney (Source)

They've also banned smoking! There is no smoking in any mall, store, or restaurant. Indeed, apparently it's illegal to smoke on the street--I didn't see anybody doing it. I did see the occasional Jeepney driver lighting up.

Apart from the rail system (which I never used) public transit in the country is all privately owned and operated, beginning with the Jeepneys or their replacements. Bus lines are private, as are all the ferry boats. The latter are clean, punctual, safe, and cheap. Domestic air travel is also cheap, the result of competition between Philippine Airlines and Cebu Pacific. The toll roads are privately operated--I'm not sure who owns them or how the right-of-way was procured. They are in good shape, but the tolls are pretty steep. Accordingly there isn't too much traffic, and most users are trucks, buses and other commercial vehicles. By contrast, publicly-owned EDSA (which is not tolled) is a parking lot for much of the day.

Approximately 25% of all Filipinos are part of the global poor. The definition roughly corresponds to the United Nation's--less than $3/day. That means 75% of the country has moved into the global middle class, i.e., possesses some discretionary income.

Grab drivers (the Filipino equivalent of Uber) earn about $15/day (net of expenses). I think store clerks are paid similarly (there are a lot of them!). That's enough money to occasionally eat in a fast food restaurant, buy toys or cosmetics, or once in awhile take a day off and go to the beach. On the other hand, one of my wife's relatives is the director of a large Catholic school (more CEO than principal)--she earns $2,000 per month.

My wife grew up in a rural barangay ("village," or "neighborhood") 100 km south of Manila, known to locals by its initials: GKBB. It consists of a single road, lined on both sides by large, mostly unoccupied houses. The story of who built, owns, and occasionally lives in those houses is the story of the Philippine economy.

The country produces no industrial exports. Agricultural land is in short supply, and used mostly for local consumption. Regards services, since English is widely spoken many work in call centers, assisting American customers. Finally there is tourism--mostly oriented around beaches and diving.

By all rights the Philippines should be a very poor country--rather like Haiti--foreign exchange coming only from low-grade services and tourism. But it's much richer than that. It's because they export people.

One third of the world's seafarers are Filipino (source). Filipinos are favored employees for cruise lines--they're 60% of the crew on Royal Caribbean vessels (source).

While unskilled labor in the Persian Gulf comes mostly from India and Pakistan, the skilled trades and mid-level engineering jobs are held mostly by Filipinos. My wife's cousin spent 20 years in Saudi Arabia, before coming home to live off the proceeds.

Thousands of Filipina women work as domestics in Hong Kong and Singapore. Hong Kong's infamous yayas (nannies) lead very hard lives, as they do also in Singapore. The movie Ilo Ilo movingly relates the story of a yaya in Singapore. Filipinas by the tens of thousands staff brothels throughout East Asia and Australia.

In the United States Filipinos are concentrated in health professions--all the way from orderly to cardiac surgeon. You will also find them in engineering and hospitality jobs. The Filipino population in the US is estimated to be around 3.4 million (source).

The Philippine diaspora is truly global. My wife, children and I spent a year in Uganda--and sure enough we found a thriving community of several hundred Filipinos already there.

All those people send money home--money that's used to build fancy houses in their ancestral home towns such as GKBB, which they'll occupy when they visit or retire. In the meantime they sit mostly empty.

Of course this works--as long as the global economy grows, the Philippine economy grows with it. It's obviously grown like gangbusters since 1995--that's why the country is so much richer today than in 1995.

The precondition for the business model is that the Philippines has enough people to export. And sure enough, it has the highest fertility rate in East Asia. About 37% of the population in the central Visayas (Cebu) is below 10 years old (source). Filipinos are rightly proud of their shopping malls, but the biggest difference between those and malls in the US is this: In the Philippines they have lots of babies, while in the United States they have lots of baby boomers. (It's an added bonus for the tourist since Filipino children are crazy cute!) The Philippines is today a lifeline to places like Japan and South Korea, peoples so obsessed with birth control that they can't even reproduce themselves.

While the Filipino fertility rate is still about 3.0 (source), it is down from 3.5 in 2000 (source). A continuation of that trend spells disaster for the country--you can't export people if you don't have any. Without people, the country becomes as poor as Haiti.

But, being optimistic, let's hope they maintain their birth rates. Then the future belongs to the Filipino. And that's not a bad future. Not bad at all.

This isn't a travel blog. Still, here are a few pics from my trip.