Why Put to Trial an Icon of Filipino Ingenuity and Productivity

With unfailing tenacity of purpose and hard work for almost seven decades, this all-Filipino enterprise, Mighty Corp. has emerged as a multibillion-peso enterprise in the mainstream economy of the Philippines.

One factor for its success is the hard work to sell a very reason-able price within reach of its target market. 
 

Why Put to Trial an Icon of Filipino Ingenuity and Productivity

In business operation under the guidelines of the Neo-classical economics doctrine, this a reward of a highly successful enterprise, operating at an economy of scale where productivity and profit are maximized and cost minimized.

This is the objective of economic governance under the national policy of “inclusive growth.”

And, therefore, Mighty Corporation must be rewarded by the Philippines Government as an “icon” of the economic achievement of the Aquino government.

BIR Commissioner Kim Henares is right that the new sin tax law has levelled the playing field and thus allow the low-priced cigarette producers to complete efficiently and eat up a large chunk of the premium and sub-premium cigarettes produced by monopolistic. Philip Morris (PM) and partner Fortune Tobacco Corporation (FTC).

“They had an advantage under the old law, but with the new excise tax law or sin tax you level the playing field. Their market was eaten up by other players” he said, at the same time quoting Henares that “their sales went down by as much as 40 percent not because of smuggling that because we have now levelled the playing field.”

MC’s gained threshold has rewarded it with a significant share of the market as reflected in its P5.4 billion tax payments in the first nine months of 2013, and BIR records showed that the amount will exceed P8 million before the year ends. This obviously irked MC’s competitor.

Herewith, the Filipino Enterprises won over the multinational corporation. Therefore, MC must be emulated and recognized so that other Filipino players in the “economics Boxing Area” are given inspiration to do better. The regulatory function of the Philippines Government must be maintained at a level playing field exacting fairness to both contending players in a situation of “price war.”

It is tantamount to graft and corruption when bureaucrats takes side in this battle of prices. It is important, therefore, that economics rights of both contending players must be respected in the exercise of the power of economic governance by the bureaucracy of a nation state.

Indeed, the position of Henares not to interfere or take sides in the market war between MC and PMFTC is commendable.

Otherwise, economic democracy is replaced by a king of economic kleptocracy, where the powers of government are used by a favored camp to protect its interest despite their uncompetitiveness and inefficiencies. This kind of situation leads to a system of market failures and create a fields nation states in the long run to compete in the global markets of the highly advanced societies.