Tuesday, February 28, 2012

Notes & Observations

Philippine Traffic,
The Philippines could single handily get rid of 90% of its traffic problems if they were to take the Jeepneys and Trikes off the road.  Of course, if they did that no one would be able to get around.  The Philippines ranks 118th out of 138 countries in car ownership per 1000 people.   They are right in-between Guinea-Bissau, which is a West African county near Senegal than I have never heard of, and Nigeria.

Rich Guy Tax,
If you look at the Philippine habit of overcharging foreigners, it does make some amount of sense if you look at it this way.

The majority of Philippinos are poor by Western standards.  The 2003 Philippine average family income was 148,000 Pesos or $3,524 per year (http://www.nscb.gov.ph/secstat/d_income.asp(http://www.nscb.gov.ph/secstat/d_income.asp).  By comparison, the 2003 average income of US households was $45,018 per year (Wikipedia), and the 2004-2005 average income in the UK was £22,800 or $36,102 per year (Wikipedia).  I doubt any Westerner could argue that compared to Western standards the Philippines is a very poor country.

By inflating the price of things for foreigners, they are in essence applying a rich guy or visitor's tax.  This is not unlike a city, county or state in the United States that has a hotel tax, to extract more money from people visiting that particular city, county or state.  Considering the disparity in annual family income between Western countries and the Philippines, I don't think most Westerners would object to paying a visitors tax. 

The problem is that because there is no law on the books, the fees, or overcharging if you will, is variable.   Some guys or girls are much bolder than others, but if they try to extort too much money, they can and do run into trouble because the guy getting squeezed might start complaining to the wrong people.  On the other hand, the guy getting squeezed may simply get pissed off, not spend any money or want to return and spend more in the future. 

Of course all that being said, if you are a foreigner in the Philippines trying to run a business and compete against Philippine companies, it makes it hard to make any money when you are paying more for everything than your competitors.

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