While the racetrack-like Elliptical Road in Quezon City rumbles with noise, fumes, and traffic, a few silent automobiles make their own rounds in the Quezon Memorial Circle that the road borders. Humbly seating four persons max, the curious rides called G Cars (in a pun-loaded attribution to their inventor, Gerry Caroro) can be hired for PHP30 per lap. Caroro laments, however, that he never intended his invention as an amusement park curiosity. He intended it to be the solution to the country’s dependence on imported oil, as well as reduce pollution in the metropolis.

Unfortunately Caroro has difficulty finding an investor for his invention, a plight shared with most of the country’s inventors. As any dutiful citizen of the Philippines tends to do, Ronald Talion of the Filipino Inventors Society blames the government for this:

“It’s already mandated under Republic Act Act 7459 (Inventors and Invention Incentives Act) and yet, for some strange reason, our inventors have to fend for themselves,” Talion noted.

“The only support we get is the P178,000 that is given to us every November to celebrate National Inventors Week (NIW). Obviously this is not enough, which is why a lot of my colleagues were forced to seek support from abroad,” he lamented. [Inquirer.Net]

An automotive industry that never was

The plight of Caroro’s fledgling effort to produce a viable automotive technology is but an addition to the tragic history of the country’s automotive industry, shared with its ubiquitous mode of transport and cultural icon: the jeepney. Originally coming from surplus and left-behind military jeeps, roofs were installed and lavish decorations applied to convert former war-wagons into colorful passenger vehicles able to seat six to ten people at a time. From the 60s until the 80s, a vibrant backyard industry emerged, where jeepneys and “owner-type” jeeps were manufactured as low-cost alternatives to lavish, large-engined American cars or their cheaper Japanese counterparts.

The jeepney manufacturing sector was never able to make it beyond “backyard” status to become a genuine car-manufacture industry, though. Beyond metal pressing and stamping, and fabrication of various “mods” to adorn and embellish each jeepney, they never went to the stage of standardization, efficient mass production, and assembly line automation. Over fifty years of jeepney manufacture remained in the realm of hand-pressed, hand-crafted, hand-painted methods. Moreover, it is peculiarly unclear if any two jeepneys are exactly alike, and it is even dubious if any of them had followed a clear cut blue print of any sort.

The last straw, however, is the country’s dependence on Japanese-made surplus engines. Despite whatever expertise local mechanics could boast about in the knowledge of assembling, maintaining and repairing car engines, not a single company has attempted to create its own internal combustion engine with the intent of mass production. The country was relegated to using surplus engines for jeepneys, as well as assembling completely knocked-down (CKD) body kits for various Japanese and American car manufacturers (and even one type of Armored Personnel Carrier for the Philippine Army). Never was the country able to completely manufacture of any mass-produced automobile from top to bottom.

Due to higher-quality offerings of truck-cabbed alternatives with passenger modules in the rear, the jeepney is now dying a slow death. While they are still “King of the Road” in Manila, low sales and profitability has killed all but the most persistent jeepney assemblers of Cavite. Their demise, however, is more pronounced in Cebu, where Chinese manufactured “multicabs” and truck-cabbed jeepneys with Isuzu Elf and Toyota Hi-Ace engines, chassis and driver modules now rule.

An industrial pariah

This situation isn’t even isolated to the automotive industry: while the Philippines has been home to several multinational companies, none of these had resulted in the creation of large local counterpart enterprises. The Philippines hosted Intel since the 1970s, but has yet to have any local company that manufactures PC components (S3 Graphics, while founded by Filipinos Dado Banatao and Robert Yara, was established in Silicon Valley). This is in stark contrast with Taiwan, which is home to computing giants Acer and Asus, among others. Texas Instruments has long had its electronics plant in Baguio, yet no local electronics company has become prominent. American Power Supplies and International Business Machines has been in the country longer than Intel has. The list goes on and on.

It is obvious that, despite the brain drain brought about by the labor export industry, the country does not lack, or at least at several points in its history, has never lacked the means to produce technical expertise that industrialization requires. Neither is there a lack in investment and funding, as evidenced by the continued presence of big-name corporations in the country, notwithstanding moves to shift factories to China. Further evidence of the above is the continued establishment of business process outsourcing firms in the country, which implies both investment and skill.

The government is not entirely remiss in its support to local industry either. Just last month the Department of Science and Technology launched the One-Stop Information Shop of Technologies (OSIST) website (http://www.osist.dost.gov.ph) to assist technology experts and inventors in finding venture capitalists and buyers. While several online pundits question the PHP20 million funding of what essentially is a turtle-paced-loading website, the project will hopefully take off and become a useful tool in aiding inventors like Mr. Caroro in fielding tech innovations like his G-Car. It has to be noted, however that this is not the first time the DOST attempted to set up a program that it hoped would help local industries take off.

Asia’s uncommon manufacturing industry roots

Asia has, arguably, three main manufacturing powerhouses: Japan, China and South Korea, but they each have unique histories in terms of the growth of their manufacturing sectors.

Japan embarked on a sizable Meiji Emperor-sanctioned industrialization effort during the late 19^th century, and while for most of mid-20^th century they had the reputation of producing cheap imitations, relentless improvements in process and technology eventually allowed them to come up with advances above and beyond their Western counterparts.

China, meanwhile, isolated for much of the half-century after the Second World War, had to rely on reverse-engineering much of Western technology, as well as technology-sharing with the USSR, and thus almost forcefully expanded its local manufacturing capability, even before its shift to the capitalist market model.

South Korea, on the other hand, was a little bit more orchestrated, with the regime of Park Chung-hee implementing continuous 5-year development periods during the 1960s that nursed and encouraged industrialization, in a rapid expansion that was eventually termed as the “Miracle on the Han River”.

During the 1950s and 60s the Philippines enjoyed a vibrant economy and an apparently advanced manufacturing sector. The sense of security this brought, however, was false: the industries that the Philippines relied on were primarily American and non-indigenous; and whatever prosperity Filipinos enjoyed rested on the mistaken belief that these foreign investments will remain on the country indefinitely. By the time the problems brought about by the Marcos dictatorship manifested itself in economic collapse, the happy-go-lucky era of American-funded industrialization was already on the way out.

An unwanted local manufacturing industry

The local market was, itself, a challenge. While the Chinese had no choice but to use whatever products are allowed by the Communist government, and the Japanese and Korean markets are fiercely nationalistic in patronizing their own products, moneyed Filipinos were obsessing themselves with everything “state-side”. Everything imported from the US was a godsend; anything local was cheap and “bakya” (out-of-fashion).

Whatever local manufacturing industry offering there was on its own, save for those that were American-branded (e.g., Concepcion Industries’ locally manufactured Carrier air conditioners). Probably the only thriving local manufacturing industry was involved in textiles, clothing, or jeepney manufacture: the latter was even threatened to be usurped by the introduction of Asian Utility Vehicles like Ford’s Fierra and Toyota’s Tamaraw.

What eventually killed the jeep industry, however, were steady albeit imperfect improvements in the local transport systems, as well as increased spending power that weaned private vehicle owners to vans and cars and away from locally crafted jeepneys and owner-type jeeps. It did not help that the local market did not have a genuine automobile product to respond to the demand.

Questions in catching up with a global economy

It is not difficult to surmise that it is now nearly impossible to catch up to the manufacturing behemoth called China. It’s hard to compete with the business viability of going Chinese: cheap labor, power, and highly developed infrastructure trumps any sort of nationalist lament; it simply dictates against the principles of profitability and sustainability. It would be rather ironic to even note that Caroro and his G-Car might turn out to be better cheaply manufactured abroad than made in the country. It should be noted that the e-jeepneys in Makati, Bacolod and Cebu are all made in China.

However, the ill-effects of the Philippine labor-export industry tend to undermine whatever benefits, both real and unrealized, that the said industry has. Large populations of disunited families will be more damaging in the long-run, and skilled overseas labor has brought neither expertise nor industry that the country could positively exploit. The questions now arise: should the Philippines try, daunting as it may seem, to catch up with the Asian manufacturing giants? Should it refocus on other sectors, particularly in services (perhaps, business process outsourcing), which might have been effective for some economies (Hong Kong comes into mind)?

Will Filipino industrialization remain as an electric dream?

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