The rise of Makati

But, so far, all these explanations have skirted the one major factor why rice from other countries such as Vietnam can still be shipped over here and sold at the market for as low as P25 a kilo, i.e., why it is cheaper to import rice than to produce it locally, although global grain stocks are down and this led to the current price volatility. But increasing local production will not necessarily lead to lower rice prices simply because our labor costs are too high compared to our neighbors.

We may not think of our farmers in the same vein as daily wage earners since they work for themselves. But nonetheless, the value of the work they do in the fields is intrinsically tied to local labor costs. This ultimately determines the price of their product, especially since our problem with rice is not one of supply but of price.

Indeed, if we are to follow this line of reasoning, we not only have a rice crisis. Almost every other product that we make and manufacture as our neighbors such as patis is also suffering a crisis.

Thus, what we should start addressing is the problem of our rising labor costs. Not by withholding wage increases or removing our legislated wage levels. What we need to do is make our labor more productive and, therefore, more globally competitive if we are to continue attracting investments and create more high-value jobs.

Time and time again, we have stressed that the key elements to increasing productivity are providing for a good education and health system. We need to become more skilled and healthier if we are to become more efficient and cost-competitive producers in the era of globalization.

One needs only to look at the example of Makati. Under Mayor Jejomar Binay, its citizens are guaranteed quality education up to the tertiary level. They also have an unparalleled health program.

Whatever basic services that are not for free are very heavily-subsidized. The makes the people of Makati as among the best educated and physically-fit not just to work but to take on the most complicated and highest-paying jobs in the market.

It is no surprise then why Makati continues to remain as the country’s center of business and commerce despite competition posed by nearby cities such as Manila and Quezon City with offers of perks such as lower tax rates. The availability of skilled labor and the excellent delivery of basic services such as traffic management and solid waste collection are enough to keep investors coming and staying in Makati.

This has allowed the Makati city government to generate an annual income that is the highest per capita in the entire country, which it spends for still more basic services that further improve its global competitiveness.

This month will see a series of activities commemorating the 338th founding anniversary of Makati. Just last Friday, the different sectors of the city plus delegations from its sister cities and municipalities held a successful parade in the central business district. Today will see the start of a four-day trade fair featuring its sister cities and municipalities.

It is not just a celebration of Makati’s ascendance from a backwater settlement to the country’s premier city. It is, in fact, a very strong demonstration of what could happen to the rest of the country if we get our mode of governance right.