… 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?
Tomorrow being Rizal Day, we honor Dr. Jose P. Rizal by reading and pondering his writings. As he wrote prolifically, we choose today to contemplate on what he wrote for La Solidaridad, the newspaper published by Filipinos studying in various universities of Europe, from September 1889 to February 1890. In that series of articles Rizal envisioned what the Philippines would be 100 years from then.
Of those who governed the country, he wrote: “If those who guide the destiny of the Philippines should, instead of granting the reforms that are demanded, continue to erode the state of the country, exacerbate the hardships and repressions of the suffering and thinking classes, they will succeed in making them risk a troubled life, full of privations and bitterness, for the hope of obtaining something uncertain.
“What would they lose in the struggle? Almost nothing. The life of the large discontented class offers no great attraction that it should be preferred to a glorious death. Poverty inspires adventurous ideas, stimulates a desire to change things, and diminishes regard for life.”
It seems Rizal had visions of Ferdinand Marcos’ dictatorship. Millions of discontented Filipinos, including those from the uppermost level of Philippine society, risk life, liberty, and fortune in February 1986 to put an end to the dictator’s rule in the hope of getting something though uncertain that something may be.
The consequence of Mr. Marcos’ suppression of the press seems to have also been predicted by Rizal. He wrote: “Is it preferable to govern in the dark or to govern with understanding? If the great Napoleon had not muzzled the press, perhaps it would have warned him of the danger into which he was falling and it might have made him understand that the people were tired and the land needed peace.” Mr. Marcos fell from power because he muzzled the press and thus failed to understand that the Filipino people were tired of a life of privation, submission, and oppression.
Rizal also foresaw the many coups d’etat staged against Marcos’ successor. Wrote he about insurrections: “All the minor insurrections that had broken out in the Philippines had been the work of a few fanatics and discontented military men who, in order to attain their ends, had to resort to deceit and trickery or take advantage of the loyalty of their subordinates. Thus, they all fell. None of the insurrections was popular in character nor based on the basic need of the people nor did it struggle for the laws of making of justice. Thus, the insurrection did not leave indelible memories in the people. On the contrary, the people realizing they had been deceived and their wounds healed, applauded the fall of those who disturbed their peace.”
He could have very well been describing the putsches led by then-Colonel and now Senator Gregorio “Gringo” B. Honasan II, the last one disturbing intensely the merry observance of Christmas of 1989.
While they cried for reforms in the Armed Forces, the leaders of the coups did not offer any specific program. They appeared to the people as just out to grab power. Interestingly, two leaders of military adventures are now running for vice-president. Both are at the bottom in the rankings of the voters’ preference for vice-president, outranked by a widow with much less experience in government.
Rizal also wrote: “We said, and we repeat it once more, and will always repeat it, all reforms of a palliative nature are not only ineffective but are even harmful when the Government is beset with ills that need radical remedy.” President Joseph E. Estrada did not even offer palliatives. He offered only himself. The squealing masa, who voted him into office, were contented, nay ecstatic, in just having him as president.
When the Philippine Daily Inquirer exposed not only his utter lack of awareness of the function of the presidency but also his nocturnal bacchanalian activity, and subsequently his plunder of the country’s coffers, the upper crust of Philippine society decided a radical remedy was needed. President Estrada met the same fate President Marcos did.
Our judiciary as has been described as the best judiciary money can buy. Judges and prosecutors for sale abound in our justice system. President Estrada, of all people, called the members of the judiciary as hoodlums in robes.
The incoming administration should heed the words of Rizal on Justice before another prophecy of Rizal is fulfilled. He said “Justice is the foremost virtue of civilized society. It subdues the most barbarous nations. Injustice arouses the weakest.”
Rizal also wrote that the Islands will probably adopt a federal republic. There is much dissension and resentment in many parts of the land towards Imperial Manila. Manila, the official seat of government, has too much control of the governance of the entire nation. The dissension and resentment have sporadically flared into violent armed conflicts.
Peace might descend upon this troubled land if the different regions, distinguished by ethnic origin, language, religion, culture, and natural resources, were allowed to conduct their own affairs and determine their own destiny as Rizal envisioned.
“If the ‘matuwid na daan’ continues, in a generation’s time we’ll be a First World country,” an emotional President Aquino said in his final State of the Nation Address last July. More of the same rhetoric on our “great leap forward” to modernity will surely make it to the airwaves as the Aquino administration hosts the Economic Leaders Meeting of the Asia-Pacific Economic Cooperation (Apec) in Manila on Nov. 18-19.