Educated reactions

As I always say, “Give credit where credit is due” and today I feel the need to share a few email responses from readers who have made an effort to research or elaborate on articles here on Ctalk.

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Hi Cito, I agree with your views that life is really hard for the majority, and that perhaps the BSP Governor was insensitive with his comments. I also like the fact that you are attuned to the spending habits of most, specially in the middle and lower classes.

“One factor I did not see in your column today was consumer debt.

This may be the ‘mayabang’ angle. I’m not an economist but I think that in addition to being consumption-led, spending habits on non-essentials compound the dire economic picture.

Many are buried in credit card debt, GCash debt, etc. Maybe out of pure hardship, but also maybe from unnecessary spend. That we have an online gambling problem is another angle.

I see this not as pure recklessness by those who can’t afford it, but partly a sign of desperation. Yes, we have too much corruption in government. But also yes, some of our old habits have to change. And we all need to grow up. – Chuck

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Hi Cito, If I may add: Gov. Remolona is the highest paid gov’t official who may be buying dollars to be stashed away thus increasing the demand for said currency and causing the deterioration of the exchange rate. More power, Carlos

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Hi Cito, Thanks for not going ballistic despite being stung.”

Francisco Alcuaz Jr./ Technical Adviser-Communications & Investor Relations, Bangko Sentral ng Pilipinas

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“Dear Mr Beltran, This has reference to your Philippine STAR article today. You are right in pointing the discussion to the right direction. Thanks. P.S. the data below are from ChatGPT

Philippines v Vietnam – Consumption Composition

So Vietnam’s consumption is slightly more household-driven than the Philippines’. BTW, that difference in gov’t consumption between the two countries translates to $29B more for the Philippines. That’s the trillion peso flood control plus some more.             – Abraham

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The point raised by Chuck regarding consumer debt is worth serious consideration, both with our personal and national interest, while Abraham’s data validate corruption to no end.

Consumer debt has become so commonplace in the Philippines, that many people borrow or incur debt for the consumer goods they “buy.” At groceries and supermarkets, cashiers now ask if you want to pay straight or by deferred payments.

On a trillion US dollar scale, the Marcos Jr. government now borrows money partly to pay for money they borrowed to pay for loans they took out through the past years while operating a government that barely generates income.

Even Grab drivers comment how ridiculous the consumer debt trap has become when it comes to buying cars. I said that all you need is maybe P50,000 to P100,000 for downpayment, but before I could finish he said, “You can buy with zero down payment!”

My Gen Z daughter Hannah laments how she and friends are perpetually “assaulted” by online ads offering different loans for different purposes. She was particularly upset by ads aggressively pushing “loans to buy medicines for your sick mother.”

What is the greater evil, that we live in a country where Filipinos have to take out online loans to buy urgently needed medicines for loved ones?

Or is the greater evil in the Philippine government, particularly the Marcos Jr. administration, that unlawfully takes money away from PhilHealth, poorly manages the acquisition and supply chain for medicines and fails to counter or regulate prices of medicines?

In other countries, taxes collectively provide for quality essential  needs at no further cost to citizens so they don’t get into consumer debt. In the Philippines, the citizens are providing spending money for government but get nothing substantial or of quality.

I too have am tempted to buy on installment for instant gratification. But a pastor once said, “We are the best at convincing ourselves about a bad idea.” The Bible also warns us in Proverbs, “The borrower is slave to the lender.”

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As far as financial literacy is concerned, someone ought to write a book titled “Rich: How the Filipino Chinese do it” or read the Book of Proverbs in the Bible.

As I go places, I notice that our Chinese kababayans all have what most Pinoys don’t have: quality of life, affluence and financial security as a result of hard work and discipline.

Some of the things that I observed is they learn financial literacy from childhood, practice it generationally and teach it by example.

When old enough, they practice or apply the learnings in the family business or in a relative’s place of business like an informal internship program.

They generate capital through strength in numbers, so families immediately share the burden, support each other’s businesses by buying within the circle and of course sharing the profit as well.

As far as loans and credit are concerned, the rule my Kwepe told me never to break was “always keep your word.” Stick to your commitments, stay humble and honor your word.

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