Tuesday, 13 April 2010

It’s great to be in the Philippines

John Mangun
Outside the Box
Business Mirror

There is so much chaos and turmoil in the world right now that again, I must say: It is great to be in the Philippines.

Over the weekend, the head of Poland’s government was chopped off by an airplane crash that killed the president, the head of Poland’s central bank, the top military officials, and scores of other important figures in the government.

Now that might seem like a tragic “natural” disaster. Yet, if Russia did not have a hand in that plane crash, then Russia is the luckiest nation on earth. Vladimir Putin ought to be spending all his money on lottery tickets. In the last few months, several pro-Western governments on Russia’s border have been replaced with leaders more favorable to the Russian Bear than to the American Eagle.

The situation in Iraq and Afghanistan has deteriorated so badly and so quickly under Obama that US military deaths in Afghanistan have never been higher. Relations are so bad that Afghan President Karzai is threatening to join the other side, the Taliban.

Thailand continues weeks of fierce and deadly anti-government protests that show no sign of letup. The king has been asked to intervene, which he has not done. The military, although taking a hard-line stance, has been unable to stop the rioting and, for the first time in decades, seems unable to wield the traditional power that it has enjoyed.

The US continues its fall into the economic abyss despite all the propaganda about a recovery. Any news that you read about a recovery is pure nonsense. There is no recovery. It is only getting worse. Consumer and business loans are decreasing on a daily basis. Its biggest retailer Wal-Mart has seen the worst store sales numbers in its history during the last three moths. Any excess cash that Americans have are going to pay down debt. How bad is it in the US? Well, China just reported a trade deficit, the first in six years. China bought $7 billion more than they exported. Of course, this is likely to be a singular event and probably not going to happen too often in the future. However, that’s $7 billion of Chinese goods the Americans are not buying.

Europe has just agreed to give Greece €30 billion to keep that country from financial failure, noting that this is just the beginning of a multiyear bailout, the amount of which no one has any idea. And Europe has yet to address problems in Italy, Portugal, Spain and Ireland.

Newspaper headlines in the Philippines talked about the new voting machines. And the biggest intellectual conversations right now in the Philippines center on the corruption factor of various presidential candidates and fake global warming/climate change.

I am often frustrated that the Philippines seems so insular at times, rarely focusing on what happens outside these 7,000 islands. But maybe that is a good thing. Business confidence is at a 14-year high based on the results of the last survey. I don’t think you could say that about businesspeople in the US, Thailand, Europe, Japan or anywhere else on the planet. Sure, countries like India are showing some confidence, but this is based on readings from a year ago. We are experiencing a 14-year high! It’s great to be in the Philippines.

Even the local gloom-and-doomers are keeping their heads down. The best the pessimists can come up with are worries about a failure, to some extent or other, of the elections. Actually, I like hearing worries about an election failure. We have been hearing the same thing about every Philippine election for the last 20 years and this kind of talk is good because it keeps the people (and the politicians) alert to make sure this does not happen. When you worry hard enough about something bad happening, it usually does not occur.

The most troublesome situation is the power shortage. Once again the government has ignored a problem that has been coming for the last 10 years. All the so-called stimulus money spent in 2009 should have been spent on new power generation. Right now, the greatest threat to the economy is lack of a reliable electricity supply. That better be the new president’s top priority on Day One of the next administration. But you know what? I am not that concerned for the short term. The nation and its businesses are much better equipped to handle a power problem for a year or so than we were 20 years ago. Yes, it will be inconvenient, but we will cope with it.

The best part of the being the Philippines is yet to come. I spend a lot of my time with the local stock market so it is hard for me not to be happy with the country. Since the Lunar New Year, it has been a one way market; up. And for a tiny little stock market like ours, that is a great big deal. By the end of 2010, everyone, especially stock-market investors, will agree with me about this country.

On a personal note, a happy 60th birthday to my friend Boo Chanco of the Philippine Star and the Lopez Group. And Boo, the best part of being 60 is not the discount card for your medicines. It is being able to use the nearly empty “Senior Citizens Only” checkout line at Shopwise. Of course, I wouldn’t know. But I am jealous of those old guys who get to the cashier before I do.

E-mail comments to mangun@gmail.com. PSE stock-market information and technical analysis tools provided by CitisecOnline.com Inc.

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