The Ateneo economic and political briefing tried to keep a positive tone but the negatives just kept on intruding. The good news is, the political vaudeville of the past weeks did not seem to scare off investors who already know when we are politically "P-M-Sing" and are truly determined to be here. We still have a net inflow of investments. With more Pinoys working abroad, there is an ever growing contribution of OFWs to the economy that threatens to break all records. And the peso, thanks to OFW remittances, has not yet drowned in the flood of bad news.
The services sector (telecoms, call centers, BPO, etc), has picked up, and so has the real estate business (probably thanks to the OFWs too). Budget deficit has stayed below target as tax collection improves. But even here, we can’t seem to sustain a piece of good news as the July collection numbers seem to indicate a downturn again. On the plus side, corporate profits are up in the first six months of this year.
The bad news, however, cannot be ignored. Economic growth, the Ateneo assessment observed, has been progressively slowing down over the last four quarters. Agriculture is down, industry is showing slower growth. Investments and government consumption are falling. That’s probably because unstable politics impacts somehow on investments, and the fiscal deficit problem leaves government little choice on expenditures. Growth in personal consumption spending is tapering off – the middle class is fast losing its purchasing power and the masa… well, they are going hungry because they have no buying power.
Exports are slowing down dramatically, with the future looking dim if declining levels of imports (mostly of materials used for export manufacturing) are any indication. Unemployment and underemployment are up, no matter what Ate Glo claims about the millions of jobs she has supposedly created. If at all, the jobs being created must be in the informal sector, Ciel surmised, which explains why people feel underemployed. Business confidence is down.
The fiscal crisis that Ate Glo declared to be over, remains the biggest headache. Projected tax revenues this year are about P730 billion. Our debt service bill is about P301 billion (interest) plus P345 billion (principal) or P646 billion or 88 percent of projected revenues. In other words, Ciel Habito explained, nine out of every P10 of revenue collected by government will go to debt service, leaving only P1 for current government expenditures (mostly salaries and a little infrastructure).
Given the dire state of our debt service burden, Habito thinks "government can no longer ignore the option of pursuing negotiated debt relief as a recourse to buy time in order to emerge from the fiscal treadmill…" But he cautioned, that such negotiations must be done discreetly, through back channels, so as not to ruffle the market. We still have to go on another round of borrowing exercise before the year is over to cover our deficit. And given the P1 trillion budget proposal of Ate Glo for next year and projected revenue collections of less than that, we can’t afford to be shut out of the international debt market.
It would also be difficult for Ate Glo to convince creditors to give us debt relief for so long as her legitimacy or ability to stay in office is under considerable doubt. Getting countries and institutions to give us some form of debt relief also requires, in Habito’s estimation, a "credible and inspiring leadership that will inspire both the trust, respect and cooperation of the government bureaucracy and the taxpaying public, as well as the goodwill of the international community, specially the government’s institutional creditors."
Now, you tell me… If you had to make a decision for an international institution, would you risk giving the Philippines debt relief, given its current political turmoil and serious governance questions, notably corruption? Is it reasonable to expect the world to, in a manner of speaking, buy a used car from Ate Glo?
Dualtech Center (www.dualtech.org.ph) is the only vocational school in the country with a training partnership with LTP. The school is certified by the European Aviation and Space Authority (EASA), the Federal Aviation Authority (FAA) and The German Aviation Authority (GAA).
At present, Dualtech Center has a total of 211 graduates working at the LTP facilities in Villamor Airbase and 83 more work—trainees in the pipeline. Among these very fortunate boys (starting salary P10,000/mo and some now making P21,000/mo) are High School graduates from the Payatas and the Del Monte garbage dumps.
We have about one hundred (100) satisfied training partner companies — among them Nestlé Phils., Ford, Honda, United Lab., SMC, Temic Phils and Panasonic. We consider the employment of our graduates a serious responsibility and many are already working even before graduation. But, above all the spiritual formation and work values of our boys are our priorities.
"Adequate medical care is available in major cities in the Philippines, but even the best hospitals may not meet the standards of medical care, sanitation, and facilities provided by hospitals in the United States."
Well, that sounds a bit sweeping and unfair. I wonder what the St. Luke’s Medical Center, the preferred medical service provider of the US Embassy has to say. St. Luke’s also like to boast that they are world class and can be compared to some of the best in the United States. They had better write the State department and convince them.
I would also venture to say that the new Medical City in Pasig and the Asian Hospital in Alabang should be pretty much world class. But then again, I may be wrong and the State department website got it right.
Mrs. Donovan was walking down O’Connell Street in Dublin when she met up with Father Flaherty. The Father said, "Top o’ the mornin’ to ye! Aren’t ye Mrs. Donovan and didn’t I marry ye and yer husband two years ago?"
She replied, "Aye, that ye did, Father."
The Father asked, "And be there any wee little ones yet?"
She replied, "No, not yet, Father."
The Father said, "Well now, I’m going to Rome next week and I’ll light a candle for ye and yer husband."
She replied, "Oh, thank ye, Father." They then parted ways.
Many years later they met again. The Father asked, "Well now, Mrs. Donovan, how are ye these days?"
She replied, "Oh, very well, Father!"
The Father asked, "And tell me, have ye any wee ones yet?"
She replied, "Oh yes, Father! Three sets of twins and 4 singles, 10 in all!"
The Father said, "That’s vonderful! How is yer loving husband doing?"
She replied, "E’s gone to Rome to blow out yer fookin’ candle!"
Boo Chanco’s e-mail address is bchanco@gmail.com