It will also make it easier for us to tap the international capital market to finance vital infrastructure like facilities for power and water services. Since it is difficult, if not near impossible to get large amounts of long-term funds domestically, tapping foreign funds is our only recourse. But the biggest turn off for foreign lenders is the peso’s devaluation and how this devastates the finances of the borrower, such as Napocor and MWSS. Allowing these services to be sold in dollars addresses that problem.
Actually, our people are ready. They are increasingly operating on a dual currency mode. Families with OFWs are quite used to dealing in dollars and pesos depending on the need. It should not be that difficult to make people adjust to being quoted in dollars for a liter of gasoline and paying for it in pesos at the prevailing exchange rate. This way, the consumer knows the culprits if any, are not the oil companies but the politicians mismanaging the economy. How’s that for transparency?
And for those of us trying to manage a retirement fund, doing that in dollar terms makes the effort worthwhile. As I have belatedly found out, doing it in pesos is an exercise in frustration and futility. A regional economic crisis followed by an Erap wipes it out overnight. There used to be a significant advantage due to the peso’s higher interest rate. That is no longer true and the danger of the peso’s devaluation has become more important.
I received this e-mail from reader Bayani Caparros, who has apparently worked overseas, and he thinks adopting the dollar is a good idea whose time has come. Here are excerpts from his e-mail.
During my postings in Saudi Arabia, loss on forex fluctuation was our daily bread in contracting. Hence, escalation clause was provided for where a project contract price was not denominated in USD or GBP. Under this specific clause, a client paid us the value of SAR depreciation against USD or GBP.
Saudi Aramco, our largest client, in the early years, about 1977-1990, allowed contracting and billing in foreign currency. We had had American and British personnel who received wages in their respective currencies. We, the Filipinos, were also paid in USD. So our technical manpower services bids to Saudi Aramco were denominated partly in GBP and USD. So the issue of currency devaluation and any loss from it was not a problem.
In my opinion, the RP government should pay the effect of the peso’s fluctuation to water contractors, and even in the case of oil companies. It’s the inept government that brought about this problem in the first place and the people who elected a bad government.
Napocor should be allowed to bill in USD, and hence, its clients granted the same. Payment by the ultimate user, the consumers, would be in pesos at the exchange rate prevailing at the time of billing or payment.
I think, however, that the best way to solve this issue is to adopt USD as our legal tender, and junk the peso.
Maybe both of them are partly right. The thing to do is to find out who among the investors given tax perks really contributed to national and social development. I am sure there are those who just took advantage of the perks and contributed little by way of jobs or development of related job creating industries.
Abacus Securities analyst Emilio Neri rightly pointed out that "the issue of granting tax incentives goes beyond the issue of foregone revenues. What the Trade Secretary seems to be missing out on is the issue of whether the funds being used for tax holidays is being put at their best use. If the P124 billion, for example, that was lost from tax perks in 1999 were instead used to build farm-to-market roads, ports or even power facilities in many parts of Mindanao, more investors would have actually been attracted to the Philippines than what the perks brought in."
There is also a need to make this system of granting incentives more transparent. Mr. Neri wonders "if we are subsiding industries that the Philippines has no comparative advantage in. For all we know, most industries getting the perks are capital intensive industries which unfortunately is not what a labor-rich country like ours needs."
A new study finds that snacking on peanuts and peanut butter may be an effective way to control hunger without leading to weight gain. Participants who snacked on peanuts reported more eating satisfaction and automatically adjusted their diets to compensate for most of the additional calories. These interim results were presented at the Experimental Biology annual meeting in Washington, D.C. and are published in this month’s International Journal of Obesity.
Researchers at Purdue University found that when 500 calories of peanuts were added to subjects’ regular diets, substituted in the diet for other fat, or eaten freely, the results were the same – the men and women automatically compensated for most of the additional calories and they spontaneously commented on the high satiety of the peanuts. They also had the added benefit of significantly lowering their triglyceride levels (TG), a known risk factor for cardiovascular disease (CVD).
These results are consistent with earlier studies at Purdue that show peanuts and peanut butter satisfy hunger better than some high-carbohydrate snacks (such as rice cakes). Furthermore, epidemiological evidence shows that frequent consumption of peanuts and nuts is associated with lower body mass index (BMI) and a reduced risk of coronary heart disease. Harvard researchers found that women who consumed one ounce of peanuts, nuts and peanut butter five or more times a week reduced their risk of cardiovascular disease by 35 percent, compared to those who rarely or never ate nuts.
Nuts to you all, huh?
Q: What do you call kids born in whorehouses?
A: Brothel sprouts.
(Boo Chanco’s e-mail address is bchanco@bayantel.com.ph)