Ten Percent Solution

I had this discussion with Danilo Rey, my business partner and another alumni from UP, regarding globalization. We just purchased some spare parts and we were surprise to find out that most of the parts sold at automotive shops are imported. Japan has a better quality but China is not far behind and cost almost half that of Japan. There are locally made parts but it cost more than the China made and is of inferior quality. We know before hand that consumer goods sold at Tutuban and 168 Mall in Divisoria are made in China and the quality and price are impossible for Filipino companies to reach. [ Ex: An LED flashlight for 20 pesos with spare battery. Whereas if bought separately, the batteries alone cost 20 pesos and the LED bulb is 15 pesos. How could Filipino companies produce a 20 peso flashlight?]

Consumer goods is one thing but automotive supplies being dominated by China? Also, textiles and shoes. What local industry is safe? Local companies will die if they couldn't compete and we don't see a way for them to compete. That led to our discussion on globalization and its effect on the Philippine economy.

I argued that globalization is already in the Philippines and we have to accept that most of the products will be buy will be from China and Filipino companies should stay away from producing products already exported by China. Danny argued that Filipino companies should continue to fight, otherwise, we will end up as a country without their own industries. The government should help, the private sector should help in order to nurture and incubate our industries. I agree with him but do not believe it can be done.

Colgate or Hapee Toothpaste?

In the midst of our arguments, Atek, our assistant asked us, "Ano ba ginagamit nyo? Hapee toothpaste or Colgate? Ginagamit kasi namin ng asawa ko Hapee toothpaste. Simple lang naman gumawa ng toothpaste and 'yun quality ng Hapee halos same lang ng Colgate. Parehas lang ng Active Ingredients. Pero malaki ang mura ng Hapee toothpaste at Pilipino may-ari 'nun. Hindi 'nyo ba alam na kapag bumibili kayo ng Filipino prod0ucts, nananalo ang producto na iyon. And kapag nananalo ang ating produkto, tayo bilang mga Filipino, nananalo din." [ "What are you using, Hapee Toothpaste or Colgate? Me and my wife are using Hapee Toothpaste. It is easy to make toothpaste and the quality of Hapee is almost the same as Colgate. Same Active Ingredients. But Hapee is much cheaper than Colgate and it is a Filipino company. Don't you know that if you a buy Filipino products, that product wins in the market. And if our product wins in the market, we, as Filipinos, also wins"]

I didn't know that buying Filipino products makes them win. Atek is right.

I agree with the issue of Colgate vs. Hapee. We should help Filipino companies win by buying their products. But how about other products wherein the foreign brand has a distinct advantage over the local brand? How could we deal with that?

10% Solution

Rufino Roy Pimentel, the president of Mitech System Solutions, narrates that there was a time that Filipino firms are given a 10% advantage in government biddings. Given a local and a foreign bidder, if the local bidder can match the offer of the foreign bidder and his price is only higher by 10%, he is awarded the contract.

I think we should use this solution to the products we buy. Let's give Filipino products a 10% advantage. Given a local and a foreign brand, if the quality of the foreign brand is only better by 10%, let's buy the local brand. Let's help them win.