Prices on Pharmaceuticals

We are often told that medicines are ridiculously expensive in the US, and that Americans are being gouged by Big Pharma. There may be truth to that, but it is not universally true.

While prices for medical and dental procedures and office visits are remarkably low here, pharmaceuticals are not low-priced at all.

An example – I have an enlarged prostate (benign prostate hyperplasia or BPH) and recently switched medications to treat it. My doctor prescribed Hytrin (2mg). He recommended that I buy only a short-term supply to see how I do with the side effects, so I bought fifteen tabs. I visited a couple pharmacies here and was quoted the same price at both – 1335 pesos ($31.07 at today’s rate, or a bit over $2/tab).

Before I bought more, I asked family in the US to check prices there. Here are the per tablet prices at Walgreens and Costco in Phoenix, compared to the Philippine prices (Philippine pharmacies do not give quantity discounts):

Naturally, I’m most interested in the Costco prices, but the Philippine price is 2.5x even the highest Walgreens price (and more than 20x the lowest Costco price). My guess (only a guess) is that the huge difference is the result of import taxes and (as with just about everything here) lack of competition.

Another Example of Philippine Business Practices

At Living in Cebu, an expat forum where I hang out, somebody posted a warning about badly-canned foods:

The other day I went to fix some (canned) sisig and scrambled eggs for dinner, and I noticed that when I pressed on the tops of the cans there was a bit of movement as though the can wasn't sealed. Into the garbage they went. Then just last Friday when we were doing our biweekly grocery shopping I noticed that several other cans in the store were the same way: not just sisig (Argentina Spicy Sisig, FYI) but also sardines. Most cans were OK, just a few of them were bad.

OK, so that sort of thing can happen. But the part of the story that tells about Philippine business practices comes in the next paragraph:

We reported it to one of the floor managers but she didn't do anything other than have one of the stockboys return the puffy cans we'd given her to their shelves …

Try to imagine an American store manager doing something like that. Here, businesses have no sense of responsibility toward their customers, in large part because they know that no one in the government or the courts will hold them accountable.

A few examples of unsafe Philippine business practices:

Bus travel
Another bus crash
Ferries
Planes

Businesses here are never held accountable for anything they do, even if they kill their customers.

Didn’t Take Long for Another One

I posted just a few hours ago about a bus accident that killed a woman here in Cebu. In that post, I commented that:

Bus drivers here are notoriously crazy – they speed, they pass on blind corners, they race each other, and they battle for passengers. These practices were apparently involved in today’s incident:

Here’s another, this time in Palawan and this time seven deaths, but once again it appears to be because of the insane driving that the bus companies encourage (emphasis added):

Seven people died on the spot when the van they were riding collided with a passenger bus in Puerto Princesa City in Palawan on Monday afternoon. [ … ] 

He said the Toyota Innova van was coming from the city proper when it was hit by a bus, which was on the opposite lane. The bus overtook another vehicle and encroach the other lane, thus the collision with the van.

Nothing will be done.

Bus Travel in the Philippines

There was a bus crash in the town of Argao here in Cebu today; one of the passengers was killed and ten were injured.

Bus drivers here are notoriously crazy – they speed, they pass on blind corners, they race each other, and they battle for passengers. These practices were apparently involved in today’s incident:

He said that based on witnesses’ account, Ceres bus 8304 (plate number CEH 994) was chasing another bus, Sunrays, about 10:45 a.m. as the drivers of the two vehicles were apparently having a contest on who could pick up more passengers at the Argao town proper. 

Ceres came from Samboan town and was heading to Cebu City like the Sunrays bus. After overtaking Sunrays, Ceres driver Ernesto Zerna failed to control the Ceres bus as it was running too fast and the road was slippery, Tecson said, citing initial findings of police investigation. 

The Ceres bus rammed a big Gmelina tree along the national highway of Talaga, about three kilometers from the town proper.

 The driver was taken into custody and may very well be punished.

But I can guarantee you that nothing will be done to the executives or ownership of the bus company, who pay the drivers commission on the number of passengers carried and the number of trips completed, thus not merely condoning but incenting the reckless driving.

For similar examples, we have Sulpicio Lines, which has been involved in several fatal maritime incidents, but never punished, and Cebu Pacific, whose plane crashed in Davao recently and received no punishment for their failure to train their crew on emergency procedures.

Embassy Still Closed (and Some Info on Holidays)

An update: The US Embassy/Consulate in Manila remains closed because of the flooding -- Manila gets floods just about every year around this time (good reason not to live there). Tomorrow is a holiday, so it will be closed then, too.

The U.S. Embassy will be closed again on Tuesday, August 20, 2013, due to continued severe flooding, road closures, and continued government warnings.  The Embassy will also be closed on Wednesday, August 21, 2013 in honor of Ninoy Aquino Day. We expect to re-open on Thursday, August 22, 2013, weather permitting. Consular services remain suspended in order to keep the public and our employees safe.  Individuals with scheduled visa interviews should watch our website or contact our visa information service at 02-982-5555 to reschedule. For U.S. citizens with American Citizen Services appointments, please either re-schedule your appointment by visiting our web site or await contact by the ACS unit in the next few days. For emergencies involving U.S. citizens, please contact the Embassy through the main Embassy telephone (632) 301-2000.

The Philippines has a lot of holidays, by the way. Visitors need to be aware of them, though the degree of business closure varies a lot. Most places that cater to tourists and expats remain open on most holidays -- Christmas and Holy Week are the big exceptions.

Ferries

There was a collision of two ships just off Cebu last night, with one of them, a passenger ferry, sinking. About twenty people are known to be dead thus far, but at least a couple hundred more are missing.

Rescuers in helicopters and boats are desperately searching for nearly 300 people missing after a ferry sank in the Philippines, with at least 24 already confirmed killed. 

The Thomas Aquinas ferry was carrying 870 passengers and crew when it collided with a cargo ship on Friday night in calm waters near the port of Cebu, the Philippines' second biggest city, authorities said. 

While 572 people had been rescued by Saturday morning, 24 bodies had been retrieved and 274 were still unaccounted for, said Rear Admiral Luis Tuason, vice commandant of the Philippine coastguard. 

The accident occurred in the mouth of a narrow strait leading into the port between two and three kilometres from shore, authorities said.

Prayers would be a good idea.

I enjoy riding the ferries here. They’re slower than planes, obviously, but I’m not in a big hurry and have traveled several times by ferry between Cebu and Manila. The company I use is the same as the one that sank, and I’ve found them to be good.

Ferries are one of the main modes of transport across the archipelago of more than 7,100 islands, particularly for the millions of people too poor to fly. 

But sea accidents are common, with poor safety standards, lax enforcement and overloading typically to blame. 

The world's deadliest peacetime maritime disaster occurred near the capital, Manila, in 1987 when a ferry laden with Christmas holidaymakers collided with a small oil tanker, killing more than 4,300 people. 

In 2008, a huge ferry capsized during a typhoon off the central island of Sibuyan, leaving almost 800 dead.

Having said I like the ferry company I’ve used, the company that operates the cargo ship involved in this collision, Sulpicio Lines, is another matter entirely.* Those two disasters mentioned in the preceding paragraph were both Sulpicio ships. The Dona Paz, which went down in 1987, was carrying more than four thousand people although the passenger manifest reportedly only showed fifteen hundred.

But nothing was done about it.

* To be fair, no one yet knows who is at fault in this instance.

The Big Mac as a Tool to Compare International Salaries

When I was just new here in Cebu, my landlord (an Iranian expat married to a Filipina) and I were having a discussion about economics. He used as an example the amount of time a Filipino working at McDonald’s must work in order to buy a Big Mac, compared to the time an American worker must work.

I thought it was an interesting comparison, and it turns out others have had the same idea: here’s an article from The Wall Street Journal about an economist who did a study on the subject (and here's the original study).

In order to calculate a real wages across countries Orley C. Ashenfelter of Princeton University found an excellent example using McDonald’s employees. In his paper published by the National Bureau of Economic Research, Ashenfelter notes that McDonald’s workers across the globe by design are asked to perform the same tasks to build the same product: a Big Mac. By calculating how many hours of work it takes an employee to earn enough to afford a Big Mac, he can show how wages change across countries. 

As one might expect, poor countries have to work longer to afford the same goods. For example, in 2011 a worker in a McDonald’s in China would have to work 85 minutes to afford a Big Mac. That compares to just 27 minutes on the job before an American employee earns enough to buy the sandwich.

The Philippines is not broken out individually in the study, so let's take a shot at doing so.

The minimum wage in Cebu City is 327 pesos per day. Since law enforcement in all areas of life here is spotty at best, many companies here pay far less. But foreign companies are watched closely, and a company as highly visible as McDonald’s (or their local franchisee) would be unlikely to take any chances, so we will assume they comply with the law.

However, note that the wages are per day, rather than per hour as in the US. Employers here generally require long days. The laundry I use, for example, is open 7am-7pm, with apparently the same staff all day; construction projects go on well into the evening. Ten hours seems to be a normal working day here, so the odds are that a McDonald’s employee makes about 33 pesos/hour. Nonetheless, I’ll use an eight-hour day for calculation purposes, since I don’t know that for sure; and on that basis the pay is 41 pesos/hour.

Recent articles I’ve read about ‘living wage’ protests say that McDonald’s US employees mostly make $7.25/hour. This study says $7.33, which is close; we’ll use the $7.25 figure.

A Big Mac in the US is $3.99 according to things I’ve read, meaning that an employee must work just over a half hour, thirty-three minutes*, to buy one. A Big Mac here is 125 pesos (I checked yesterday), so a Philippine employee must work just over three hours, 183 minutes. So Philippine workers get about one-sixth the effective pay of an American.

What’s more remarkable is that, even compared to China, the Philippine workers are poorly paid – the Philippine workers must work twice as long as those in China to buy a Big Mac.


* The quote from The Wall Street Journal said twenty-seven minutes, but that was based on the $7.33 average wage, and on a lower price for the Big Mac. I’ve tried to tilt all my assumptions against the US and toward the Philippines to avoid being accused of making the Philippines look bad.

At a Resto

When I order a drink here (or anywhere), I almost always say 'Coke or Pepsi, please' since I don't know which they offer and I don't care which I get.

A couple evenings ago I was wandering in the Colon district and stopped at a bar/resto ('resto' is the local term); they have a few chairs on the sidewalk and I could sit there and watch the passers-by. Since many of the passers-by are female and attractive, this can be an enjoyable way to pass the time.

The following conversation ensued:

Me: Coke or Pepsi, please.
Waitress: Pepsi?
Me: Yes, Pepsi, thanks.
Waitress: We don't have Pepsi, Coke only.
Me: Okay, Coke.

She brought me a Pepsi.

The Philippines Is Blowing Another Opportunity

The Trans-Pacific Partnership is a free trade area that is being negotiated among many of the leading more-or-less free economies of the Pacific Rim. It started in 2005 as an agreement among Brunei, Chile, New Zealand, and Singapore. Since 2010, a number of other countries have been negotiating an expanded group, to include Australia, Canada, Malaysia, Mexico, Peru, the US, and Vietnam.

Just this week, Japan announced that they intend to join as well (actually, they have wanted to join for a while, but they just had an election and the Prime Minister won big, so now he feels emboldened to make big moves).

Japan will finally sit down at the table with 11 other nations in Malaysia on Tuesday to negotiate the trade rules for the Trans-Pacific Partnership agreement after years of contentious political wrangling. 

The current TPP participants … have already gone through 17 rounds and aim to reach an agreement by year’s end. Late-comer Japan has only three days left to state its case before round 18, which started July 15, ends on Thursday. 

But Japan, whose GDP accounts for more than a fifth of all 12 TPP nations combined, still has a solid chance to be on the leading edge of drafting new trade and investment rules for the Asia-Pacific region.

As the Japan Times notes, a basic requirement for membership is that economies be open to competition. Japan, for example, wants greater access to other countries for its automobiles, but has long had high tariffs against agricultural imports – they would have to give up their tariffs on rice and beef.

The Philippines badly needs to be in on this, for a couple reasons. Most obviously, they need to be able to trade with these countries, and any time a trading group is set up, those outside the group suffer, as importers in each member country will tend to prefer to buy from exporters in other member countries.

The other reason is that membership would force the Philippines to open itself up to competition, which its horribly inefficient businesses (and their horribly abused customers) desperately need.

And that, of course, will not happen, because the families who own the country will not allow it.  A few months ago, the Trade Secretary admitted that the country “isn’t ready.”

The Philippines is not yet ready to join the international free-trade agreement known as the Trans-Pacific Partnership (TPP), the head of the Trade Department said Wednesday. 

"We can pursue it, but is it wise to lobby for it? Let’s just wait until we’re ready. We’re not going to actively pursue negotiations for us to join. It can be distracting and we have no resources for it," Trade Secretary Gregory L. Domingo told reporters. 

“We’re not yet ready for the TPP. We have to do some more homework first on our environment, labor and investment on the equity side because we have many restrictions,” he added. 

Doesn't sound like he wants in very badly, does it? Those restrictions he mentions will almost certainly never be removed, because doing so would require the approval of the very people who could be hurt by any changes in the economy. The country’s unwillingness to accept foreign competition was demonstrated again this week, when the courts ruled that FedEx is not allowed to operate here.

… the appellate court said international freight forwarding was a public utility. It upheld its earlier ruling declaring FedEx (Federal Express Pacific Inc.), a foreign corporation, disqualified by the Constitution from involvement in public utilities in the Philippines.

PAL No Longer Banned from Europe

Philippine Airlines, the country’s largest carrier, has been approved to once again fly to Europe. PAL was banned three years ago, because of its failure to meet international safety standards; it is still forbidden to fly to the US, although this article says they are hopeful of getting FAA approval soon.

All other airlines in the country remain banned from Europe, and Cebu Pacific, the only other airline that might plausibly try to fly that distance, didn’t apply for reinstatement.

“Cebu Pacific decided not to go to Brussels [for the air safety committee meeting] to concentrate their efforts to analyze what happened in Davao to ensure...that this kind of incident does not happen again,” he added.

Good thinking guys. Right after the utter incompetence you displayed in that case (details in this post) is not a good time to go around bragging about your devotion to safety.

[Last] month, a Cebu Pacific flight skidded off the runway in Davao City, causing the airport to shut down for two days. The passengers and crew were able to disembark safely.

Hmmm … the last sentence omitted a word. It should read: “ … were able to disembark safely … eventually.”

Cebu Pacific Gets a Whitewash

In this post yesterday about the Asiana crash in San Francisco, and in this one a month ago about a Cebu Pacific crash in Davao, I predicted that nothing would be done to penalize Cebu Pacific for their failure to train their flight crew – a failure that led to disgraceful behavior by that crew that endangered the lives of a planeful of passengers – because the airline is owned by one of the Philippines’ richest men. I also mentioned that there had been no action in the month since the crash.

Well, I was half-right. A more diligent search found this item detailing the actions of the Civil Aviation Authority – so I was wrong about no action being taken. I was right about the action taken, however: It was a total whitewash of the airline.

Although Cebu Pacific will not be receiving any fines or penalties from the Civil Aviation Authority, it will be asked to comply with an action plan that emphasizes safety over cost-cutting measures.

Boy – that’ll show them!

And it gets worse. Fearful, I guess that even that extremely timid slap on the wrist might annoy the Gokongwei family, the CAA immediately backed off:

The Civil Aviation Authority wants to reassure the flying public that Cebu Pacific is a safe airline. 

Unfortunately, this is how things are done here.

Kudos to the Asiana Flight Crew

The plane crash in San Francisco today, tragic as it was, could have been much, much worse. Shortly after the crash the plane burned. Had the crew not evacuated the plane very quickly, many more people would almost certainly have died.

Video from passengers after the crash landing show slides deployed and people exiting well before fire really took hold of the aircraft.  

Asiana have confirmed there were 291 passengers plus 16 cabin crew onboard flight OZ214. Looking at video of the burned out wreckage and of smoke and fire soon after the crash, some may be surprised the casualty figures are so low considering there were more than 300 onboard. 

This is very reminiscent of an incident in Toronto in August, 2005 when an Air France plane crashed. Although there was a large fire in that crash, all 309 passengers and crew on the Airbus A340 managed to get off. [ … ] 

Most of the planes we fly today are designed so passengers can get out within 90 seconds in an emergency. That is what we have seen in the case with this incident in San Francisco.

Contrast the behavior of well-trained flight crews with what happened recently in the Philippines. Just last month in Davao, a Cebu Pacific plane crashed, and the flight crew burst into tears instead of into action.

Passenger Andrew Bautista said he and his wife, who occupied Seats 1E and F, knew something was wrong when the flight crew failed to issue the usual announcements—seatbelts fastened, seats upright and window shades raised. They were just told to prepare for landing. 

“And then we were going so fast, that we hit the ground within ten seconds, there was a bump and then the lights went out and there was smoke all over,” Bautista remembers. And the next thing they knew, a flight attendant was crying. 

Except for that, the crew was silent, and people began to panic. “The fact was that very little was said on the plane, perhaps out of fear or uncertainty,” said Nelson Lindsay, a New Zealander who was on his 40th trip to Davao. 

Five foreigners were on board and begged the flight crew to speak in English for their sake but between the terrified screams, frantic ramblings, and the passengers’ rush to get their carry on baggage from the overhead bins, very few bothered to translate to any of the foreign passengers that day. 

Passenger Marlon Bo took it upon himself to calm the passengers and ask them to remain seated as the plane might tilt and bring even more danger to everyone. In the darkness, people prayed and held on to their children and their family, others frantically texted friends and relatives fearing that no one would know what had happened should the plane burst in flames.

Thankfully, there was no fire, or presumably every passenger would have died, since absolutely nothing happened for twenty minutes, until a passenger took charge and organized the plane’s evacuation.

A month later, there has been no further word on anything being done about Cebu Pacific’s failure to train their crew. As I wrote at the time, I expect nothing to happen, because the airline is owned by one of the country’s richest men, and run by his son.

The Filipino Reaction to Criticism

I've noticed that Filipinos, when faced with any form of criticism, whether it is something like a complaint to the manager of a restaurant about poor food or service, or something about their country, such as crime, corruption, crappy infrastructure, or whatever, will respond in one or more of three ways:

• Deny that there's a problem ("The food is excellent, sir, you're the only one to complain")
• Use the equivalence argument ("It happens in your country, too")
• Shift the blame ("It's all the fault of the US")

What they don't do is fix the problem. But then, why should they, if there is no problem and it's somebody else's fault?

When Is It Fair to Criticize a Philanthropist’s Choices?

For the most part, I think the answer to the question is ‘never’. If donors want to give money to causes or institutions they favor, it’s none of my business. The exception might be donations to clearly evil causes – I would look askance at someone contributing to the Ku Klux Klan, for instance. But short of that, do as you please.

Having said that, I will immediately contradict myself, and raise a question about a recent donation I heard of, by a guy named Fred Uytengsu, who gave eight million dollars to the University of Southern California to build a new swimming facility at their campus  

In front of a crowd spilling over with Olympic swimmers, divers and water polo players and teeming with NCAA champions and All-Americans, USC Athletics celebrated its ceremonious groundbreaking Friday (Nov. 2) of the $16 million Uytengsu Aquatics Center, made possible by the record $8 million lead gift by former walk-on swimmer and 1983 swim captain Fred Uytengsu. 

Uytengsu, whose gift is the largest ever to Athletics from a former student-athlete, joined his former swim coach and USC legend Peter Daland as well as USC President C. L. Max Nikias, Trojan swim great John Naber, Athletic Director Pat Haden and current women's water polo player Madeline Rosenthal as speakers at the hour-long event. Uytengsu was accompanied at the event by many in his family, including his wife Kerri (who he met as an undergrad at USC) and two of their children, Ashton (a 2009 USC graduate) and Kayla.

Why does this annoy me? After all, the guy, his wife, and his kids attended USC and he was captain of the swim team in the eighties. One might argue that donations to schools are better focused on the supposed purpose of the school (by which I mean education) rather than sports facilities, but still, I can understand his motivations.

But here’s what bothers me about it: Fred Uytengsu is a Filipino. His father founded Alaska Milk Corporation, and Fred currently heads the company, which is the country’s largest dairy products company; until last year, the Uytengsu family continued to own most of the company. They sold their share for $300 million.

I think that if a person is immensely wealthy in a desperately poor country, that he might feel that his contributions should best be focused on the people of his country. It’s not as though there are a shortage of worthy causes that Fred probably sees evidence of every day – schools, daycare centers, homeless and hungry children.

And it’s not as though Southern Cal is itself a struggling institution. With an endowment of $3.5 billion, they should have no trouble building a new swimming center without his help.

I’m going to make a statement I can’t prove, but that I think is probably pretty safe: USC’s endowment is greater than the endowments of every college and university in the Philippines combined. 

The three most prestigious private universities here (and therefore the ones most likely to garner donations and endowments) are Ateneo de Manila, Santo Tomas, and de la Salle. I can’t find anything about endowments for the first two, but DLSU, according to Wikipedia, has a total endowment of $6.5 million (less than 1/500th that of USC).

So again I will admit that it’s Fred’s money to do with as he pleases, but perhaps he might reflect on that old saying my mother used so often: charity begins at home.

Philippine Business Practices in an Emergency Situation

I’ve posted several times before about the incompetence of many/most Filipino businesses. Often, as in this most recent example (a case of a guy who can’t get a restaurant to give him a bottle of A-1 Steak Sauce that actually has any steak sauce in it), it’s funny.

But, at other times, the story is far less amusing, as in last week's plane crash in Davao that only through sheer luck did not end in tragedy.

A Cebu Pacific flight from Manila crashed (to be more precise – it skidded off the runway) on landing at Davao. The circumstances tell a lot about how things are done in the Philippines. Here are some passenger comments:

Jacones said the flight crew and the pilots seemed to have been stunned by what had just happened that they failed to immediately attend to the passengers. 

“They (cabin crew) apparently lacked crisis management training because they acted so poorly to the situation. A few of us passengers [were] the ones who tried to calm down the rest of the passengers,” he said. 

Some 15 minutes later, a pilot came out from the cockpit and addressed the passengers. 

“He told us that it was the heavy rain, and that they lost sight of the runway lights,” Jacones said.  [… ] 

Passenger Menard Dacono, 26, a Filipino business development manager working in Singapore, said when they reached the airport, not one official from Cebu Pacific faced them. 

“No one from the airlines offered an explanation,” Dacono said.

And here's a first person account in timeline form by a passenger. We’ll pick it up immediately after the crash (and I've added emphasis on a couple points):

6:57pm.The scene from inside the cabin was like a scene taken directly from a Hollywood crash movie flick. It was eerily dark with only the emergency exit lights on. We could hear the sound of the rain and wind gushing outside, and the loud cries of babies on board the plane. Nobody talked for a few seconds until my wife shouted “OPEN the doors” then people suddenly broke their silence. The smoke inside the cabin was enough to stir panic among the passengers reeling to get out of the plain. Yet we were instructed by the cabin crew to stay put, as they would wait for further instructions from the captain.

What? Really? You gonna wait for this freakin’ plane to blow while we were still inside? The initial responses from the passengers were a total mayhem. Everyone wants out. People were crying, some were trying to use their mobile phones to contact their loved ones outside, which I just realized could have been disastrous as it could ignite a flame that could blow us all off to the heavens. 

1 min, 2mins, 5mins gone by and we are left to ourselves trying to figure out what to do next. Some members of the cabin crew were crying as well as they try their best to calm the passengers down. No ambulance, no fire trucks and no help from outside on the first few minutes of the crash. 23minutes after and with only smoky air to breath, not only oxygen, but patience, was running dangerously low as well. 

It took the courage of one person, whom we only know as Captain Bok from the Philippine Navy, to stand up calm everyone down. He knew what he was doing and he was in control when even the cabin crew looked like they were really at a lost on what to do. Capt. Bok gave clear instructions for everyone to sit down so that we can leave row by row to prevent the plane from tilting over. He was the clear definition of a “guiding voice”.

And then after they’re out of the plane:

7:50pm.There were only 2 vehicles that ferried the passengers from the grounds to the terminal. One was a private van most probably owned by somebody working on the premises, and another ambulance. The passengers are left out standing in the rain waiting for a ride. From the moment of impact, it took more than 5 minutes for the fire fighters to reach the scene. There were no medical first responders; in fact there were no one else. I can just imagine what would’ve happened to us if the plane did blow up and there were serious injuries on site. It would have been a mess. 

8:10pm.All the passengers are now safe at the baggage conveyor section, eagerly awaiting guidance or any support from the Cebu Pacific management. But lo and behold, again there was no one to face us. Wow, in the movies you could see an outpouring of support for people who have just been to such traumatic experiences. But for us…no food, no warming blankets for those who were dripping wet from the rain, no drinks, no nothing! Not even the sight of the cabin crew consoling passengers. There were even no seats for us to rest our shaking bodies so most people just sat on the conveyor itself. And then I remembered, yes this is not Hollywood.

The incompetence involved here is phenomenal. First, of course, the pilot should not have tried to land if he couldn’t see the runway lights. I was once on a flight when the pilot aborted the landing because of weather conditions – this was in Austin and we were very close to landing when the pilot pulled up and took us to Houston because the cross-winds were too severe. Nobody – not the airline, nor the crew, nor the passengers – likes that decision. But this case tells us why it’s necessary.

Second, the cabin crew appears to have been almost as bad as the pilot. Why in God’s name would it take so long to evacuate the plane? The damned thing might burst into flame at any moment. The pilot takes fifteen minutes before he even talks to the passengers? What the hell was going on in the meantime?

Third, the airport apparently has no idea how to deal with an emergency, either -- slow response by the fire crews, no response by medics (it’s not covered in the quotes above, but there were ill passengers, including a pregnant woman, who could not get medical attention, and medical crews sent from the city were refused entrance to the airport), and no provisions even for transporting passengers from the runway to the terminal (heaven knows they had long enough, given to inexcusable delay in getting the passengers off the plane).

And fourth – Cebu Pacific’s ground crew went into hiding.

While the pilot and crew should be punished (if what we’re reading is true), and probably will be, the failure to properly train the crew in emergency procedures is totally the fault of the airline’s management.

The airline, however, is owned by John Gokongwei, the third-richest man in the Philippines, and run by his son.

Therefore, here is what will happen:

• The pilot will be nailed to the wall
• The cabin crew will be fired
• A report will be issued whitewashing everybody higher up

Customer Service in the Philippines

The incompetence of Filipino businesses is often mind-boggling to foreigners. Much of the time we just shake our heads at it, or laugh at it (we mostly laugh when it happens to somebody else), or (if it happens to us) occasionally go off on a crazed rant, as in this tale of empty A-1 Steak Sauce bottles.

My steak arrived at my table, and I reached for the A1 Steak Sauce bottle which was already on the table when I arrived. It was empty. So I asked the server for a bottle with some steak sauce in it. She takes the empty bottle, apologizes, goes to another vacant table, takes the bottle from that table, and replaces it with my empty bottle, and returns to my table with the other bottle. I give it a shake; nothing. I open it and try to pour some on my steak. Nothing. 

So I repeat the process. And so does she. She takes the 2nd bottle goes to another vacant table, replaces the bottle with the empty one, and brings me YET AGAIN, ANOTHER EMPTY BOTTLE. At this point, I'm on my 3rd empty steak sauce bottle, and my steak is getting colder than it was when it was first served to me.

So he asked for the manager, and from this point, we follow the standard Filipino rules for dealing with complaints: 1) Deny; 2) Excuse; 3) Shift the blame (to the complainer, if possible).

Denial being an impossibility in the instance, the manager moves directly to excuses: “Well sir, you can't fault the server, the bottles are not transparent glass so they can't see if they're full or empty."

Ah yes, the ol' brown glass excuse. Which, of course, doesn’t explain why the waitress put empty bottles on the other tables. When this is pointed out, the manager moves to shifting the blame: "Well sir, most of our customers don't use the steak sauce, it's mostly there for appearance.”

Which is peculiar on its own (are A-1 bottles really that attractive that you'd put them out as decorations?), and translates as “Why do you want steak sauce anyway, huh?”

On a Philippine expat forum I frequent, odd customer service incidents are the source of great amusement. Here are a couple I enjoyed recently:

I was trying to buy a set of tires for my truck, there were about 6 kinds on display there the same size that I needed, so I asked for 4. After a lot of looking around the back, they came out with another 2 to match the display one, and an odd one. So changing my mind, we eventually found out that they only stocked 3 of each kind! I had to make do with 2 pairs. 

I can understand a need to limit inventory, but why three of something normally sold in sets of four? Dumb question -- because it’s the Philippines, of course.

My favorite purchase is something like screws or pop rivets.  I'll ask for a box of whatever size I want and the reply is always "Sir, we sell them by the piece."   I ask how many are in a box, get the same answer.  So I ask for two thousand screws and next thing you know there are four sales girls counting out screws.  one by one....  Now you actually see the box, so you grab one and show them how many screws are in the box and get out of the hardware store before lunch time.

Pretty much everything here is sold by the piece. I have a cold at present, and when I bought some cold medication yesterday, I was asked how many I wanted. I said six, so the pharmacy clerk picked up the blister pack of ten, got her scissors, and cut off six for me.

I don’t mind buying individually instead of a package in such cases, although it’s nice to get the dosage instructions from the package. If you ask, though, the pharmacy clerk will tell you how many to take and how often. Though the first time I shopped in a drug store and asked the dosage, the clerk answered, “One every six hours … I think.” She turned to another, who nodded. It didn’t fill me with confidence.

Consumer Protection: There Ain't None

The Philippines may have laws on their books about consumer rights, and laws forbidding fraudulent business practices; if so, they are enforced with the same rigor as traffic laws. Meaning, not at all.

Every expat here can tell a horror stories about such things as being cheated or lied to or trying to get a refund for a defective product. I have several, but here's my favorite.

Shortly after I got here, I bought a SmartBro. It’s a USB modem that provides a wifi connection to the internet. When I bought it (it cost about 3600 pesos -- $90), I was told it would provide connections of up to five megabytes per second, for which I would be paying 50 pesos per day.

Being a newbie and naive, I assumed "up to five megabytes per second" meant that I would occasionally get something close to five megs, and probably get two or three megs the rest of the time. While not great, that would be sufficient for most purposes.

Silly me. I've never gotten even one meg from it, and it's usually about 0.3-0.5 -- when it connects at all.

When I complained to Smart, the sales guy pointed to the 'up to' on the sign; when I said that that was very misleading, considering that I generally got about 1/10th that speed, he just shrugged. It was an eloquent shrug, saying more clearly than words ever could, "So what? We didn't lie."

In the US, what would happen to a company that did something like this? In most Western countries there are laws forbidding 'false or misleading advertising' and making claims of 'up to' a given speed could only be legally done if that speed is actually attained with some regularity by a substantial portion of users, and if speeds reasonably close to the claimed speed could be attained by the rest. Otherwise, while the claim is not false, the company would be misleading customers as to what the customers could reasonably expect.

After receiving a bunch of complaints, the Attorney General of some state would file a consumer fraud suit against the company, a bunch of other states would join in, and pretty quickly the company would be forced to pay a huge settlement to the customers it had defrauded. AGs love to file this kind of suit, since it’s great publicity, and most of them are planning to run for governor.

I have no idea what the laws say here, but it appears that, as enforced, advertisers can mislead all they want. I’m not sure about outright lies.

SmartBro is a product of Smart Communications, the cellular arm of PLDT, the biggest phone company in the country. The chairman of PLDT is Manny Pangilinan, whose nephew is a senator closely tied to the Aquino administration, so any government action for anything they do is unlikely at best.

Bad Customer Service and Short-Term Contracts

Customer service in Filipino stores is atrocious. It’s not easy to have really bad customer service when you are as over-staffed as these stores are, but somehow they manage it. Restaurant and fast-food service is terribly slow (20-30 minutes is normal wait time for a meal in a ‘real’ restaurant, and fast food places generally have long lines that seem to never move). Supermarket check-out lines are also long and slow-moving. Employees are frequently unable to answer the simplest questions.

I’ve been most bothered by it, recently, in grocery shopping. At the store where I shop most often, the checkout lines are, as mentioned, absurdly long, with usually only about half of the lanes open (at peak hours). The store is, like most Philippine retail outlets, heavily overstaffed by Western standards, and there will be dozens of people stocking the shelves (or pretending to stock the shelves while chatting with each other) while customers stand in line. Often some of the lanes will have no baggers, slowing things further, as the cashier bags items (again, despite the many people stocking shelves).

(In case you are going to ask why I continue to shop there, the answer is that all the alternatives are exactly the same).

I’ve heard a number of reasons given for the Philippines’ customer service deficiencies, all of which I agree with at least somewhat. Here are a couple that are often suggested among expats discussing this issue:

• Filipino customers don’t know any better. Customers in these stores have never experienced good customer service, so their expectations are low and they won’t complain. 
• There’s no competition. Most business categories in the Philippines (including retail) seem to be organized on a cartel basis, so that ‘competitors’ have no incentive to improve their processes in such a way that they differentiate themselves. Foreign competitors who would introduce better practices and shake up the cartel, are excluded by the government's protectionist policies.

No doubt these are a big part of it, but I think it has mostly to do with the wide-spread Philippine practice of hiring employees on short-term contracts, in order to avoid paying benefits. The law apparently says that temporary employment cannot exceed six months, so contracts are shorter.

The ways that such a practice impact customer service are pretty obvious:

• Poor training. What’s the point of putting a lot of time and effort into training people who will be gone soon?
• No cross-training. If initial training is a waste of time, that goes double for cross-training. In a US supermarket, stockers are cross-trained to work the check-out lanes during peak times.  
• Lack of knowledge. Inexperienced and untrained employees are of course less able to answer customer questions or deal with problems.
• No incentives. An employee who has no hope of getting a promotion, and in fact knows s/he will be laid off in a few months, has no reason to care much about the company or the customer.

As employers in the US seek ways to avoid Obamacare, this practice might spread; but it seems the preferred way of avoiding benefits in the US is through part-time employment. Most temporaries there are just for seasonal work or specialists called in for projects (e.g., consultants).

Philippine Infrastructure Is Really, Really Bad

If you want to save some time, you can skip the rest of this post, because the headline says it all. The rest is just examples.

Pretty much every bit of infrastructure that Americans take for granted – roads, sidewalks, internet, electricity, telephones, etc – is in the Philippines either inadequate, shoddily made, poorly maintained, or all of the above. Herewith a few examples.

No electrical or telephone wires are buried – all are strung from pole to pole as they were in the US when I was a kid. At the left is what it looks like on the major street running near my home.

You’ll also enjoy seeing how these wires are worked on. Below, these guys are adding a new strand to the ridiculous mess that already exists.

As you can imagine, having all these wires above ground contributes to the frequency of power outages. Given that we are in a typhoon-prone location, the consequences of a typhoon (or any good-sized storm) are magnified by the power outages that result, and recovery from a storm will take longer because there will be no power for a considerable length of time.

Even aside from lines going down, power supplies in many areas are inadequate (when I was in Zamboanga a couple weeks ago, the power went out six to eight times a day and the city had turned off almost all street lights to conserve power) and very expensive (my electricity bill this month was 4070 pesos -- $100 -- for a small one-bedroom apartment (about 550-600 square feet).

Internet is unreliable and very, very slow when it is working. I recommend to people who need internet (e.g., for work) that they have two providers in order to have a back-up. I have a wired DSL that occasionally gets me as much as 2mbps (for comparative purposes, my cable service in Chicago was 12-15mbps), but is usually under 1mbps. It goes out at least once a week (never any explanation), sometimes all day. When it goes out I use my USB plug-in wifi. The last time I had to use this, a couple days ago, the speed was 0.3mbps.

Traffic is a monumental mess. Cebu City, the second biggest metro area in the Philippines, with a population of 2.5 million, has no freeways and no mass transit system. Ponder that for a moment. What do you think it is like to try to get around in a city of two and a half million people that has no mass transit and no freeways?

And it’s actually worse than that, because the whole island is as densely populated as most American metros, and traffic is horrible even outside the city.

Here’s some perspective. The province of Cebu (basically the island, plus a few small neighboring islands) has a population of 4.2 million in a land area of 2200 square miles. Metro Chicago has over double the population (9.7 mil), but covers a land area more than five times larger (10,856 square miles). So the entire province is more than twice as densely populated as one of America’s biggest metros.

The effect is that moving about is very difficult. As an example, last month when Kathleen and Jeff were here, we decided to go swimming with the whale sharks in Oslob, a town at the south end of the island, a bit under sixty miles from Cebu City. Getting there and back took three hours each way. Sixty miles took three hours because the entire trip was through populated areas, with houses and businesses on the edges of the narrow two-lane road and all sorts of vehicles – motorized and not – sharing that road.

Manila, with a population of over twenty million, has even worse traffic. Although it does have a rudimentary mass transit system and a few miles of freeway, these are totally inadequate to deal with the enormous population.

What roads there are generally are poorly maintained. A tunnel project built in Cebu a few years ago has begun to leak, so the city had a structural engineer take a look at it. The part of the article I found most interesting was this sentence:

“Maintenance should be considered on a regular basis,” said his report to Mayor Michael Rama.

Can you imagine how bad things are, that he even needed to make such a suggestion? Shouldn't the need for maintenance be assumed? But practically nothing is maintained here. And when things inevitably break down, they aren’t fixed.

Here’s an example that has particular meaning to me, a bit of broken sidewalk that I stepped into, and damn near broke my leg, a few days after arriving here.

After this I learned that one always watches where one steps, and should never assume anything. I recently walked by that spot, and nine months later, it hasn’t been repaired. It probably never will be.

There often are no sidewalks, even on busy streets – or businesses build on what used to be sidewalk, or squatters are living there. So people frequently have to walk on the street, contributing to the traffic snarl.

Given these problems, you can understand, I’m sure, why few international companies are interested in investing here. The Philippines lags far behind other countries in the region in attracting foreign investment.

Philippine Wealth Concentration

The poorest people in the Philippines are poorer than most Americans can understand. Close to 20% live on less than fifty pesos ($1.25) per day. There are desperately poor people in the US and other developed countries, of course, but not so many and not so poor.

Meanwhile, the wealthy control an enormous portion of the nation’s wealth.

The richest person in the US is, as you know, Bill Gates, who has a fortune estimated at $66 billion, according to Forbes, which is considerably more than that of Henry Sy, the richest in the Philippines -- Sy has $9.1 billion.

But in reference to the size of their home economies, Sy is far richer. Sy’s fortune equals 3.8% of the GDP of the Philippines, while Gates is good for just under 0.5% of US GDP. In fact, relative to GDP, the top eleven fortunes in the Philippines are all bigger than Gates’.