Thursday, 22 October 2009

RP: A country you love to hate

John Mangun
Outside the Box
Business Mirror
http://www.businessmirror.com.ph/home/opinion/17608-rp-a-country-you-love-to-hate.html

It does not make any difference in the big picture of things. In fact, no one listens or cares. But it does make me feel better, so every few months I need to react to some of the negative attitudes and analyses about the Philippines.

I have compared the Philippines to its national sports hero Manny Pacquiao on occasion and I still think that comparison holds true; the best pound for pound and always confusing the experts.

Prior to Pacquiao’s fight with Ricky Hatton, Floyd Mayweather Sr. had this to say: “Is he crazy? [Ricky] Hatton will beat the socks off of [Manny] Pacquiao.” Of course, Pacquiao beat Hatton in what the British Broadcasting Corp. called “a devastating second-round defeat” in an article titled “Hatton floored by brutal Pacquiao.” And I particularly like the final sentence: “He [Hatton] was taken to hospital for a precautionary brain scan.” Maybe the “experts” who picked Hatton should have had that brain scan.

But that wasn’t the first time they misjudged Pacquiao and had it wrong.

Bob Velin, the boxing “expert” for USA Today, wrote this: “There are some who say that Manny Pacquiao must be crazy to get in the ring with Oscar de la Hoya.” We all know how that bout ended.

Underestimating the Philippines, like Pacquiao, is common. I like this from BusinessMirror on October 20: “Admitting it underestimated the flow of Filipino worker remittances and taking into consideration other growth factors, the World Bank [WB] is now likely to upgrade its full-year gross domestic product forecast for the Philippines originally pegged at negative 0.5 percent.”

What was the WB’s first clue that its estimates were wrong and what took it so long to figure it out? These are the same experts who said remittances would fall like a rock, at least 4 percent, in 2009. Back in February the best they could offer was a hope that remittances did not go down more than that. Sort of like the expert who said Pacquiao might win by another “bad” spilt decision, instead of knocking Hatton’s socks off in the second round.

The WB watches through nine consecutive months of increasing overseas remittances to the Philippines and then concludes that maybe remittances are not going to decrease. “In July, the World Bank said the economy is headed for a 0.5-percent contraction. Now ‘We think the government’s current estimate of 0.8 percent to 1.8 percent is entirely feasible.’”

I would love the hear the World Bank’s take on the upcoming Pacquiao-Cotto fight and Floyd Mayweather Sr. discussing the Philippine economy. We probably couldn’t tell which “expert” was talking.

The World Bank is saying it will have revised growth estimates for the country next week. Maybe it should wait until next January to release its 2009 estimates. It might be a little more accurate that way.

I would also like to hear from Citigroup Inc., the world’s largest bank in terms of customers, about the next Pacquiao fight since I think its analysis of the economy is going to be proved wrong. From GMAnews.tv: “The Philippine economy is likely to grow only by 1.4 percent, instead of its previous 1.9-percent estimate.”

Actually, you cannot really fault anyone for bad predictions about the economy any more than you can about boxing matches. All predictions are based on personal interpretation of the available data.

However, the thing that really bothers me is when facts are handpicked to support a particular conclusion. It seems that too often the conclusion is that the Philippines is terrible and “facts” are found to substantiate that. And it always seems to happen when the analysis is about the Philippines.

The Philippines seems to be an easy target when you are looking for a country to be negative about. When foreigners are buying US stocks, it is “a sign of renewed investor confidence.” In the Philippines, foreign stock investment is called “hot money” that “can be taken out of the country at any time.” At the end of June, a government statistician at the National Statistical Coordination Board hinted that the Philippines is “on the brink of recession” with absolutely no data to justify that forecast.

Last week a local columnist degraded the fact that profits of listed Philippine Stock Exchange companies rose nearly 50 percent over 2008. The author then went on to show that San Miguel’s profit increase was in large part attributable to a one-time gain from the sale of San Miguel Beer as the company restructures its businesses. That is an inaccurate analysis.

Although writing just a few days ago, the author conveniently ignored, for example, the property company SM Development’s earnings for the nine-month period ending September up 37 percent from 2008 and revenues rising 30 percent, none of which is a one-time affair. There are many other examples that would easily disprove the author’s negative analysis of the Philippines. Of course, this author also talks about improvement in the US economy, again mentioning recent increased auto sales while failing to mention that the increase was due to a multibillion-dollar government give- away to those who purchased new cars. Just plain dishonest analysis.

When Pacquiao beat de la Hoya, the “experts” called it a fluke. When he beat Hatton, it was an upset. I guess when he beats Cotto, it will be called a miracle. They say the same thing about the Philippines and its economy anytime we do well. It is just not right.



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