Franco Varona on the Philippines' Energy Emergency, and Investing in Solutions for Middle Class Filipinos - E683

Okay, listen, this is how much oil we have. This is how much we know we have. I get it, there's a lot of distractions right now. There's a little bit of a corruption scandal,

big corruption scandal. There's a lot of other issues in our country right now, but I'm gonna declare this emergency and we're gonna hyper focus everybody

to make sure that we never get to the point where we're all screwed. Our gas prices are by the way, are already amongst the most expensive in the world

to the consumer right now. In the last 20 years, lines of communication have broken down. This is why the US is so politically divided.

This is probably why places like the Philippines is also very politically divided. Innovation can be trendy. Like it's like, oh yeah, blockchain.

NFTs. NFTs, let's go. Digital land. Yeah, digital land.

Metaverse, right? 60 billion into the metaverse. So that was an innovation and it was in my mind very trendy.

And now the trend is gone and so is all that money. And I like to say we invest in solutions because we want to invest in things that Filipinos need, no matter what the cycle is.

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Hey Franco, welcome back to the show in person. Thank you very much, man. I'm so glad to be able to see you in person. The last time we did this was actually online, so.

Yeah, yeah. Yeah, thank you so much. Always good to be having fun and chatting and shooting the breeze with you as well. It's interesting because your last show, you went viral.

You were comparing, I think, the speed of incorporation in Singapore versus the Philippines. And it turns out that a lot of Filipinos were very unhappy as small, medium enterprise owners about this state of affairs. Yes.

Well, I am happy to tell you it's exactly the same. It's exactly that they have changed. I think all the feedback that you got in that one very viral clips was true. I think it became viral because what I said resonated with the Filipino population.

This is the problem. I saw some of the comments and some of the comments were saying, yeah, it's actually quite fast if you go online. But the reality is it's, yes, it's fast, but then there's like four or five

different other requirements that you need. And that's the same case, by the way, it still takes forever to close a business in this country. Yeah.

And I think it was interesting because at that time we were discussing it as something that came up as an anecdote that you felt something could improve on. But I think looking at the comments, I think hearing about how many people's experiences where they had to run from department to department, people will duplicate cancellations.

And also some commenters were talking about how they actually had to bribe in order to get the paperwork process eventually closed. I was quite an eye-opening set of insights for me because I'm not a Filipino small media enterprise owner who is to incorporate. So I thought it was an interesting learning moment for me as well.

Yeah. There's opportunity in digitization in that case. I think there's a lot of gray areas and I think that's where the paperwork exists. And that's why things like bribes happen in this country. But I also see it as opportunity.

If we can start getting the government and the government's trying to digitize a lot of the processes, then of course a lot of that eruption goes away. Yeah, because there's no way to gum up the process. There's no way to gum up the process. You can't slow it down.

This is literally algorithms doing everything for you. Really should be the case anyway. Yeah, why make small, medium enterprise life harder when it's already hard, you know?

100%. Yeah, and you're creating jobs, giving people livelihood, you're letting them feed their family, and don't they make things slow and hard for them?

100%. 100%. And I think the Philippines went through an experience last year.

I guess we're still going through it right now, where there was some corruption issues that were happening in the country. Again, I think I see that as an opportunity to clean up.

Do you know what I mean? If you think about, I use Gemini for this by the way, if you think about corruption scandals and how that actually affects countries.

And of course I put in a biased prompt. I said, what are the positive outcomes that come out of corruption scandals historically? Cause I'm a positive guy.

Gemini actually told me that in the best case scenario, within a year, things look much better. And what is the best case scenario? high profile arrests, processes are cleaned up,

all this different stuff. And in the worst case scenario, it takes five years. But in both scenarios, there is actually a bump in productivity.

In other words, the government money, in the case of the Philippines right now, it's most likely the government money is actually being spent in the right places

because the folks who were maybe doing the funny stuff before, they're scared or not here. And that actually means that there is an allocation of capital that is being spent

where it's supposed to be spent. So right now in the Philippines, yeah, I think I would say that there's a lot of people saying, this BS, there's a lot of anger around

this whole corruption issue that happened last year, 2025. But I do wanna say that my belief is that at the very least, if it's not all the capital that was supposed to go into the right projects

last year, at least a small part of it is going into the right projects this year. And that's already a change. That's already a positive change.

Now of course, there's a lot more momentum that we need to have moving forward,