To try to run across the length and breadth of Boracay is to catch a glimpse of at least five very different worlds.

There is the world of White Beach and Bulabog Beach, of course. The world of low-budget and mid-range hotels; a world that looks increasingly more like Greenbelt or BGC but transplanted beside what is possibly the world’s longest stretch of extra-fine, blindingly white, flour-like beach; the world of P120-coconuts and P2,000-lunch buffets; the world of the tired, overworked professionals and others from the middle-class who saved up for weeks to flee to this island for a quick escape from the madness of Manila, or Seoul, or Shanghai.

Then there is the world of those quiet, all-but-fenced-up coves up north, literally set above and apart from the rest of the island by its higher elevation and its walls; the world of Shangri-la, Crimson, and Newcoast; the world of those who can afford to pay P30k per night to stay away from the masa crowding White Beach; the world of the world’s top 10%.

But on the southern end of the island (and in various other pockets scattered across it) is an entirely different world altogether: the world without grand views, farthest from the best beaches; the world of wooden huts or workers’ dormitories, 5-10 boarders to a room; the world where many of the construction workers, waiters, kitchen staff, janitors, security guards—and everyone else who make it possible for the first and second worlds to exist at all—sleep for the night and try to build a life; the source of cheap labor on this island; the world of the working class.

In one tiny corner of the island, there’s also the steadily shrinking world of the indigenous Ati people; a world that looks more like a forgotten refugee camp, now housing all those who once freely roamed across these hills and valleys; the world of the dispossessed. 

And then there’s a world that’s not physically here but whose presence can be felt nearly everywhere here: the world of the proprietors of such corporations as the Hennan group which has been steadily gobbling up many of the smaller family-run resorts here; the world of the biggest landowners and stockholders of all these big developers constructing all these concrete edifices sprouting like giant weeds slowly devouring the entire island; the world to which much of the wealth brought here by all these middle-class refugees from the city—as well as by all these underpaid workers residing on this island—are wired to regularly; the world that ultimately corners much of the profits produced by the cheap labor from this island’s hinterlands; the world of those who carry out the dispossession. 

While there is traffic between these worlds, the movement seems anything but two-way: Those workers from Manoc Manoc must report to White Beach or the five-star hotels up the hills daily, of course—but who among those staying in these hotels even know that shanties exist down the Boracay Central Highway?

On paper at least, those from the world of workers’ dorms are free to hang out at Discovery Shores to watch the sunset or to swim at Shangri-La’s exclusive cove, but who among them are willing to pay for a meal worth several days’ wage—or who can surmount the invisible walls keeping them away? 

I talked to one waiter—a student from a low-income family taking up a course in “hospitality management” in Misamis. He said he had to pay P15k for the chance to do an OJT at one beachfront hotel here, and he works nine hours daily manning the buffet table but is not paid a single centavo. He likes to hang out at White Beach on his days off, but how can he afford to pay for the P200 fruit shake being sold here? How many others like him live here?

Even in—or especially in—what, despite everything, still remains one of earth’s most spectacularly beautiful islands, there is no escape from the separation, aggression, and exploitation that comes with capitalism.

Herbie Docena, PhD, is an independent researcher who teaches part-time at the University of the Philippines Diliman.

Read more: The dimensions of inequality in the Philippines, by the numbers

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Ours is a developed capitalist economy to the extent that the capitalist economic system that grips the world today is already fully mature, and that specifically in the Pacific-facing geographic region called the Philippines, it has almost completely defeated competing production arrangements.

Capitalism is an organic, totalizing system with a global division of labor. The spirit of capital that possesses the lithium mines of Salar de Uyuni is the same one that bewitches the coastal battery makers in Zhejiang. The ghost of accumulation that hijacks the body of a seafarer trained in Manila is the same one that animates a shipping CEO in Rotterdam.

Capitalism tightening its embrace over a particular society no longer necessarily translates to a commitment to improving the instruments of production. It no longer exists to allocate labor and capital to mass manufacturing, or to even secure national sovereignty (a locally dominant bourgeoisie with access to robust domestic markets does not translate to a geopolitically autonomous one).

Otherwise, we wouldn’t have witnessed the economic stagnation of Russia when the Soviet Union collapsed and capitalism invaded the whole of the Warsaw Pact, the persistence of labor-intensive sectors in the Third World despite the availability of capital goods, or even the deindustrialization patterns in capitalistic nations, core and periphery alike.

Global value chains

The improvement of the instruments of production and the allocation of the factors of production are consequences of the nation’s position in the global value chains in the worldwide division of labor—and no longer the state of capitalist development.

Hence, our relative lack of modernity: It simply has to do with the fact that capitalist forces have already selected the Philippines’ location in the chains—that in low-value-added, labor-intensive assembly. If not us, it would have been some other postcolonial nation. Just as if Taiwan didn’t exist, maybe we will all be buying our microchips from Kuala Lumpur or Chachoengsao.

Sadly, this location renders us unable to pay high wages or build an industrial base for the cheap mass manufacturing of consumer goods that the working class demands. But our bourgeois rulers do not mind, for they can generate globally comparable profit rates to support their luxurious culture just the same.

(Note: TheGlobalEconomy.com estimates the average stock market return for the Philippines from 1988 to 2021 at 9.06%. Compare this to the 9.4% average return for S&P 500 in the United States from 1972 to 2021 and 9.9% from 1992 to 2021.)

Perspective

What kind of an economy is the Philippines? Is it agricultural, services-based, or industrial? The short answer: It depends on whose perspective.

If you’re a capitalist (foreign or domestic) choosing a sector to invest in, your interest will be the relative size of the sector, because size provides a sense of sector growth and sector rivalry. And of course, you will look at GDP data—from which you will conclude the dominance of services. In particular, wholesale and retail trade, which captures 18.71% of GDP.

But if you are a worker, the economic structure will look different. Agricultural employment (26.77% of employed) edges out wholesale and retail trade (21.73%), the subsector with the largest GDP. Break it down further and crop and animal production—basically farming (23.77%)—dominates. Retail trade (19.28%), construction workers (8.24%), and government workers (6.1%) follow.

So for the employed, it seems that there are more farmers than any other worker type. And here’s why: Farming skill among various crops is substitutable enough that farming workers can call themselves a generic “farmer.” But no one identifies as a “service worker”—one is either a driver, a cook, a teacher, a scientist, or a cashier. 

It is the same with industry employment. One is a plant worker in plastics, a semiconductor engineer, or a miner, but most workers don’t really see those as “industry work.” But farming is different; this is perhaps why people see more farmers than most worker types.

Export data

Finally, how does the rest of the global market see us? Note that they don’t care about our internal structure as much as they care about what we can export (either goods or services). So we have to look at our export data per item.

If we do so, we will see the clear dominance of semiconductor manufacturing (25.4% of exports, according to the Philippine Statistics Authority). So for the world, we are already a sophisticated economy that has assembled sufficiently adequate immobile factors so as to emerge as a thriving semiconductor manufacturer.

As far as the global market is concerned, we’re already an industrialized country, no longer dependent on agricultural exports, and with a healthy business process outsourcing sector (23.6% of exports). We even rank 28th among 133 countries in economic complexity, which is a measure of how sophisticated our exports are.

Of course, it doesn’t feel that way for everyone.

Capitalists who are here see the dominance of services, because that’s where the most value added is. Local workers see the dominance of farming, given how disparate the skill sets of service occupations are and how substitutable farming skills are for different crops. Only the supply chain sees the dominance of manufacturing.

Conclusion: One characterizes or assigns a typology to the Philippine economy based on what one is measuring, and one measures according to one’s interest. As always, all perspectives have a bit of truth. It is up to us to continue the conversation to improve our understanding.

(Simon Kuznets, the Nobel-awarded economist, once thought that there are four types of economies in the world: developed, underdeveloped, Argentina, and Japan. If he were alive today, he would have added the Philippines.)

James Matthew Miraflor is a graduate student at the College of Engineering, University of the Philippines Diliman, and an independent consulting analyst. —Ed.

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