Peter's Perspective
9th September 2016 by Tama Churchouse

A Case of Beer, a Priest… and a Simple Question

It was a warm, clear afternoon over this year’s Easter weekend. I was sitting on the breakwater of a small rural fishing village situated around 275 kilometres south-east of Manila.

My daughter and I were visiting the hometown of my domestic helper… a Filipino lady whom I employ in Hong Kong.

My daughter was off playing with the local kids. So I sat there on a little plastic chair, shooting the breeze with the local fishermen.

In major cities, most Filipinos have a good grasp of English. But out here communication was problematic, so I was using a dialect that guys the world over speak fluently: beer.

I bought a couple of cold cases of San Miguel and a few cartons of cigarettes to pass round, and we sat there enjoying the breeze. One of the guys fetched his guitar and strummed out a few tunes.

Tama's new friends playing guitar and drinking beer near Ragay Gulf, the Philippines

What on earth was I doing here?

Well, I’d made this trip specifically for my eldest daughter. She’s six-years old.

I wanted to take the opportunity to show her people living different lives in different places.

I wanted to give her a quiet reminder that Hong Kong is a bit of a bubble… that there is a much wider world out there… and that she has it far better than most.

It can be easy to forget that nearly half the world’s population live on less than US$2.50 a day. In Hong Kong that doesn’t buy you a cup of coffee.

There are a billion children globally living in poverty, according to UNICEF, and over 20,000 children die every day from its effects.

I figured there’s no harm in my daughter spending some time with kids who have far less than she’s fortunate enough to have been given.

And make no mistake, the Philippines is a poor country. These kids lived in cinderblock huts with dirt floors. They didn’t have much…

This kind of experience won’t make much impact now necessarily. But as she gets older I know it will help ground her and give her some perspective on life.

Now for me, this trip provided some fascinating insights into trends far, far bigger than this small fishing village of 2,000 people.

Let me explain.

You see, I can read all the investment bank research I want. I can dig through pages of statistical reports from the Asian Development Bank. I can go visit companies with Peter in Manila.

But trips like these offer something far more valuable. A chance to observe what’s really happening on the ground in the thousands and thousands of villages like this all over the country…

After all, villages like this are where half of the Philippines’ 100 million people live.

There are two observations I want to share with you.

The first struck me on the day after our arrival.

One of the kids was throwing a tantrum. (I have three kids myself so nothing new there!)

The tantrum died down and I wandered over to the hut (nosily) to casually enquire from my helper what was wrong.

She pointed to him, sitting cross-legged and now silent, on the floor of the hut.

In his hands he held a large smartphone. He was playing games on it. Hence the peace!

I hadn’t noticed before, but it suddenly struck me that everyone had a smartphone.

Here we were, miles from anywhere, with few modern conveniences… but everyone had incredibly powerful internet-connected handheld computers in their hands.

Surely, this really was absolutely transformative?

Smart phone data advertisement in a tiny fishing village in the Philippines.

I am still wondering what these devices will ultimately mean for countries like the Philippines… being mobile, fast data, powerful devices, online banking, facebook… but in fact it was the second observation that was more profound to me.

And it provides a small window into the huge opportunity that Peter is talking about in this month’s edition of The Churchouse Letter.

Back to those beers on the breakwater… A few more guys had turned up.

Word had spread that the foreign visitor had opened up a couple cases of beer. I was more than happy to oblige.

One of the guys, the local priest, spoke good English so we chatted.

Nearly all of the others were fisherman. That was their livelihood. I’d seen them bringing in their catch that morning.

I asked my new friend a question.

“What is the most dramatic change in the past 10 years that has benefitted this place?”

I already knew the answer. Mobile phones, smartphones and the internet.

It couldn’t possibly be anything else…

I was wrong.

My friend just answered “the road”.

Surely it couldn’t be that basic? But it was.

You see, in recent years a concrete paved road had been built, connecting the village to a much larger network of roads further inland along with the major road running up the island.

Previously, access to this village had been via dirt track. I took a ride on a section that was still dirt. I have to say… both speed and comfort immediately fell by 80%.

A simple concrete road…

It put the village on the map.

It allowed the fishermen to dramatically extend the marketplace for their perishable products much further afield.

It allowed easier and faster delivery of consumer goods and food to the little market shops that dotted the village.

It brought opportunity and improved lives.

A road… the most basic form of infrastructure there is. And it had made all the difference in the world to this tiny fishing village tucked away on the shores of the Ragay Gulf in the south of Luzon, Philippines.

In the latest edition of The Churchouse Letter, we’re exploring this theme of infrastructure growth in Asia. And in one particular country, the Finance Minister recently announced plans to connect 700,000 villages just like these with infrastructure.

The opportunities these plans will create are just tremendous. Both for the villagers, and for you and I.

For me, this three-day trip served as a humbling reminder of just how powerful and effective even the most basic public conveniences can be…

Good investing,

Tama

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