Thursday, 25 June 2009

Why do they put down RP so much?

Outside the Box
John Mangun
Business Mirror

SO what did we do wrong? Is it something the Philippines said? Did the country somehow offend the Western experts? Maybe they are just angry that their forecasts have been wrong. Or perhaps they are jealous of our small success. Whatever the reason, over the last few months the Philippines has been subject to the most incredible amount of economic bashing possible.

I wrote back in February that over the 2008 Christmas holiday, the foreign economic forecasts for the Philippines, mostly positive before, had suddenly turned negative. The shift was like the difference between night and day.

Of course, we have to note what these people say. I mean when the International Monetary Fund, the largest financial institution in the world, and the World Bank (WB) talk, you should listen. Back then, the general comment was that the Philippine economy was super dependant on overseas remittances, and those remittances were going to drop like a rock. In fact, remittances were supposed to be much lower in 2009 than ever before.

A funny thing happened. The amount of remittances did not go down. Sure, the rate of growth is slower, but the dollar value of the remittances is historically high.

On Monday, the newspaper headlines (which look like they are written by the foreigners) screamed “OFW remittances plunge amid economic decline.” Is there a local journalism award for the most blatantly bogus headline? Actually, remittances from the US are dropping. But the fact still remains that overall remittances are higher in 2009 than in 2008.

Along the same lines, Philippine Airlines was going to have to field extra flights to bring all the fired overseas Filipino workers home. That has not happened either. The fact is that overseas deployments are higher this year than in the last, and thousands of job offers are going unfilled.

I mean, these guys are supposed to be experts and the year is almost half over. When are all these economy-killing things going to happen?

Exports have been badly hurt by the near economic collapse of the West. And the job losses have been devastating to the people who were let go. But the total number of jobs created has more than offset the losses, as evidenced by the April numbers that are much better than in 2008.

The Philippine Economic Zone Authority registered an 18-percent increase in investments to P9.75 billion in May from P8.25 billion in 2008, which will create over 6,000 new jobs as against some 3,000 in May 2008.

Now comes the WB predicting that the Philippines is going to absolutely, positively go into a recession this year. A week ago, we had a conference of all the local gloom-and-doom experts saying the same thing. You know what else? In April 2009, just two months ago, the WB predicted 1.9-percent growth for the Philippines. Interesting!

I think I may have found the reason the Philippines is being bashed so much by the world financial community and their local supporters. From the Inquirer: “The World Bank said there was nothing extraordinary about the Philippines that would keep it immune from the crisis gripping the world economy.”

Excuse me if I am impolite, but that is absolutely, positively one of the most stupid comments I have ever read, showing complete ignorance of the country. Maybe all these people are just plain dumb. If not extraordinary, at least the Philippine economy is different from most other nations.

As shown by the general economy, in spite of our exports being down by 40 percent, our exports have only a minimal overall impact on the nation, unlike many of our neighbors where 20 percent to 30 percent of their gross domestic product (GDP) depends on export earnings. Perhaps the WB experts were watching Hayden Kho videos instead of doing their economic research.

Then the WB tells us that the Philippines is in deep trouble because there will be a large reduction of foreign money coming in this year. Guess what? We have always had the smallest bite of the foreign-investment pie. Unlike other countries, the Philippines GDP does not depend on foreign investment.

I cannot understand why the experts, local and foreign, are still predicting such a dire and dismal economic future for the country when nothing in the last six months supports that view. It is almost as if they are hoping and praying that the Philippines will sink into economic disaster.

Most important, we are not dependant on the US and Europe for our economic survival and prosperity like other neocolonial countries. I think the “experts” hate that fact about the Philippines.

Maybe if we were being forced to beg the World Bank to borrow a few billion dollars to stay alive, they would be more optimistic. If you are a banker, you are always favorable to the people who owe you money, and do everything you can to get the others to borrow from you, including telling them how bad they are supposedly doing.

A side note: On Tuesday, June 17, at 9:40 a.m., I sent an alert to the stock-market investors I advise to sell short-term trading positions. If you are riding out this necessary and important correction, not to worry. The correction will end. When we bottom out at support, the next leg up will be around 400 to 600 points.

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