Category: money

no documents, no proof

now that paolo duterte’s name has come up as, allegedly, a player of sorts in the illegal drugs market, the senate hearing on the huge shabu smuggling under faeldon’s watch seems to be going nowhere remarkable, except maybe to demonstrate how impossible it is to get names named and personalities shamed and charged, puro “hearsay” kasi, walang dokumento.  and so when the prez says about the pagkakadawit of his son: show me the evidence, give me an affidavit, and i will resign (cool na cool), eh wala na, tapos na ang boksing.

imagine if comelec chief andy bautista were as cool-na-cool re wife tish’s allegations. instead he looks, seems, gets hot under the collar, the same with his kuya martin.  i suppose because nga of all those documents that tish found and that are now under scrutiny by the authorities.  even if he were innocent, he has a lot of explaining to do, and really he has no one to blame but himself.  given the animosity pala between him and his wife, it’s hard to believe how careless he was with such important documents, atbp.  it tells me that he became too sure of himself (hubris) and of his power over his wife (money).

anyway manolo quezon raises a good point.

…it’s not as if the common-sense solution for anyone desiring to exonerate themselves isn’t clear. With so many officials, elected or not, weighing in, the obvious solution seems curiously absent so far: Bautista signing a waiver to all his bank accounts.

the yellow camp believes, hopes, prays that chief andy will be found innocent, of course.  unless he’s guilty beyond reasonable doubt.  then, next we pray that duterte finds and appoints a rare one who is relatively beyond reproach, both at home and at work, and who will get us out of the pocket of smartmatic.

dirty linen, dirty elections?

natabunan nang bonggang bongga ang customs probe sa lower house kahapon, and not because faeldon the chief didn’t show up, rather because of a corruption bomb exploded by patricia cruz bautista, estranged wife of COMELEC chief andres bautista.

imagine.  tish accuses andy of undeclared unexplained hidden wealth in the hundreds of millions, if not a billion bucks php, and she has all sorts of official documents daw, including bank passbooks, to support her allegations.  read her affidavit here.

andy denies any wrongdoing, of course, he was rich na even before the PCGG and COMELEC gigs, but maybe not that rich?  because he’s disowning some of the bank deposits, some of the assets belongs daw to his parents and sibs, and some, he alleges, could have been faked.  he also says that tish has a long-time lover and the couple has a political agenda, omg.  to discredit the 2016 elections?

nabuhayan bigla ang bongbong camp  atbp. na feeling-cheated pa rin by…ummm….the yellow camp?  smartmatic?  COMELEC?  all of the above?  no wonder andy was always siding with smartmatic no matter what the controversy?  ooops not fair.  innocent until proven guilty.

andy says he’s the victim here, it’s all about money, tish is just greedy.  ang backstory ay, 2013  pa sila naghiwalay pero hindi magkasundo sa settlement of properties because daw tish has been demanding a large amount of money. 

say naman ng abogado ni tish, his client only wants what’s legally her due, that is, half of everything (legally acquired, of course).  but but but, it would seem that chairman andy doesn’t think she deserves that much.  during negotiations, ayon kay atty martin loon, chairman andy said “that his wife deserves zero.” 

ang tindi, di ba.  ang lupit, at ang talim ng hugot.

does she really deserve zero, as in, nothing?  surely not.  is he himself beyond reproach, if not at home, then at work?  we don’t know yet, but because of his very powerful position as COMELEC chief, we need to know whether he deserves our trust or not.

this is not merely a private marital spat but a public face-off between political camps that could have important ramifications.  chief andy should stop talking to the press and prepare his defense, seriously.  badmouthing tish isn’t winning him any pogi points.

Bad news for the peso

Amelia HC Ylagan

President Rodrigo Duterte’s first year in office was unfortunately marked by a devalued peso, which fell by 7.33% to P50.53 to the US dollar as of Friday June 30, from P47.08 on June 30, 2016 (freecurrencyrates.com, 07.01.2017).

When the peso declined five percent in September 2015 following China’s devaluation of the yuan, the Bangko Sentral/National Treasury “adopted a managed float that swung through changes in investor sentiments, rather than a dollar peg that is harder to defend in times of distress (The Philippine Star 09.15.2015).” The entire Association of Southeast Asian Nations (Asean) has learned their lessons from the Asian financial crisis of 1997/1998 and the global financial crisis of 2008/2009 as they watched debt service and maturities vis-à-vis foreign exchange reserves, and diluted the effects of currency depreciations (Ibid.).

The exchange to the dollar had been below P48 for many years in the peso’s managed float (from 1993 to present) as it maintained price stability to sustain economic growth while keeping the peso convertible in a changing and increasingly interdependent world economy (The Philippine Star, 10.31.2016). But even a weak peso has both positive and negative effects on the Philippine economy, according to BSP Deputy Governor Diwa C. Guinigundo (xinhua.com, 09.09.2015). While certain sectors, such as exporters, overseas Filipino workers (OFWs), and the business process outsourcing (BPO) sector, would benefit from a cheaper peso, it would at the same time make imported fuel, raw materials, and other imported goods more expensive (Ibid.).

Leonor Briones, former National Treasurer and at that time back-to economics professor at the University of the Philippines (now incumbent Secretary of the Department of Education under President Duterte) said that the depreciation of the peso is “double-bladed” for the reasons cited by Guinigundo, adding that the government would need more funds to pay for the servicing of the country’s foreign debts which are denominated in US dollars (Ibid.). That September in 2015, the peso plunged to P46.93 pesos to the US dollar, its lowest level in more than five years (Ibid.)

But after just more than a year, the peso broke the critical level of P48/$1 and dived to a seven-year low. The peso was the worst performing currency in Asia vs. the US dollar, which was strengthen ing with the prospects of Fed rate hikes in December. The September depreciation of 4.1% was the worst monthly performance since October 2000, at the height of the political crisis during former President Joseph Estrada’s term. The peso was at its weakest in 16 years. (The Philippine Star, 10.31.2016).

Columnist Wilson Sy analyzed whether the peso is weak on its own or a victim of the US dollar’s strength. He concluded that “contrary to popular notion, the peso’s drop in September was not due to a strong dollar. In fact, the peso was a victim of its own weakness (Ibid.).” Foreign funds became jittery due to negative headlines, and pulled out. The peso weakness caused stock prices to fall, bond yields to go up and credit default swaps to rise. Foreign funds flying out and Philippine asset prices plunging across the board prompted investors to reduce their exposure to the Philippines even more, causing the currency to depreciate further (Ibid.). It was barely three months into President Duterte’s incumbency.

Foreign media was more vocal than local media in tying up the depreciation of the peso to Duterte. “The firebrand Duterte, who is often compared with Trump, has sparked concerns in markets not just for his erratic outbursts, which have included threatening China with a ‘bloody’ confrontation over disputes in the South China Sea (note: Duterte position pivoted 180 degrees as he now avoids clashing with China), but also for pursuing a ‘law-and-order’ agenda that has been blamed for a surge in extrajudicial killings. Murders allegedly have been ordered by the Philippine president during his tenure as mayor of Davao city (CNBC 09.27.2016.).”

Ratings agency Standard & Poor’s affirmed its BBB long-term rating on the country but made a significant inclusion: “We believe this could undermine respect for the rule of law and human rights, through the direct challenges it presents to the legitimacy of the judiciary, media, and other democratic institutions. When combined with the president’s policy pronouncements elsewhere on foreign policy and national security, we believe that the stability and predictability of policy making has diminished somewhat (Ibid.).”

The ratings agency’s warning spooked markets, Joey Cuyegkeng, senior economist for Asia at ING, said: “To make such concern an ‘official concern’ reinforced market’s guarded disposition (Ibid.).” Duterte (reportedly) responded with a profanity-laden speech complaining about ratings agencies and promising to create alliances with China and Russia (Ibid.).

And so on June 30, at the close of Duterte’s one year in office, the peso tumbled to around P50.5, threatening to go to P51 (tradingeconomics.com, 07.01.2017). It must have been seen coming, as core inflation rate increased 2.90% in May 2017 over the same month in the previous year, from a record low of 1.40% in September of 2015. Was all the monetary/economic upheaval some market risk-reaction to the declaration of martial law in Mindanao on May 23, and the reported growing numbers of killed, the estimated massive property, and moral damage to the country and to the people?

Outgoing BSP Governor Amando Tetangco said in May that it (martial law) was a “decisive move” for Duterte. “The main objective is to improve security as well as peace and order situation which should lead to even greater confidence down the road,” Tetangco told reporters (ABS-CBN News 05.24.2017).

Good news bears for the Philippine peso? So we pray.

PH awash with cash

Tony Lopez

… It is not for lack of money that the government cannot institute drastic reforms and alleviate poverty. This government and this country are awash with cash. The economy is awash with cash.

Where is that money?  To start with, the savings rate is 30 percent of the value of output of goods and services or GDP.  GDP is P15 trillion.  So 30 percent of that is P4.5 trillion.   With that, we can finance the entire government’s operations for one year and still have P1 trillion of excess money.

We have $27 billion in annual OFW remittances. That’s P1.35 trillion.  It can finance the entire government infrastructure program in 2019.  The P1.35 trillion is 1.6x the infra budget of P847.2 billion this year. This P1.356 trillion is orphan money because nobody marshals it for productive purposes.  The P1.35 trillion thus is marooned inside elegant malls and in forests of condos where a square meter is overpriced at least five times its real value.

In addition, we earn $25 billion from our call centers and business process outsourcing (BPO).  That’s another P1.25 trillion.

Moreover, right at the central bank, private banks have parked P3 trillion of private deposits— money the banks are too lazy or too afraid to lend (because the BSP is a much better borrower and you talk to only one guy).  If the banks were to lend out the P3 trillion, they would have to employ entire bureaucracies—processing loan applications, interviewing loan applicants, visiting or assessing properties used as collateral, and holding so many meetings to approve the loans.

… Additionally, the Philippines has $81.8 billion in foreign reserves—money that can pay for importations for a year.  That’s another P4-trillion money.

So why do your bureaucrats keep courting credit rating agencies to get an investment grade credit rating?  We don’t need to borrow abroad.  We don’t even need foreign investments.

We have so much money locally.  So why does Duterte go around the world panhandling?  The Philippines is capital-surplus.  In fact, the country has been exporting capital, rather than importing, in the past 10 consecutive years.

Duterte has appointed a new central bank governor, Nestor Espenilla, 58.  He is an economist and a 36-year veteran at BSP. Our central bank is supposed to be among the world’s best. Outgoing BSP Governor Amando Tetangco Jr. has been cited world’s best no less than eight times.

So again I ask this:

If the Philippines is awash with so much money and our central bank is that good and (it is among the oldest central banks in Asia), how can you explain the fact that in Asean, with the possible exception of Indonesia, the Philippines has the highest inflation rate, the highest interest rates, the highest unemployment, the highest poverty incidence, and the lowest foreign investment inflow and the lowest ranking in Asean in Human Development Index or a measure of people’s well-being.

How come out of 1,500 towns, 600 towns  do not have a bank branch?  How come more than 60 million Filipinos do not have a bank account?

Amid so much liquidity (the techspeak for so much cash), how come 25 million Filipinos wallow in abject poverty?