A bold forecast

While at the helm of the Philippines' central bank, Amando Tetangco Jr. was able to help boost economic growth to its highest levels in more than three decades.

[Blogger’s note: Here’s another piece — an editorial — written by Arnold Tenorio, the Manila Times’ business editor, for the paper’s February 21, 2011 issue. The piece may be “dated,” he himself told me in an email message, since “it was written before the BSP raised policy rates.” [See: Manila Times]
“But I believe the value of this piece is that it pointed out the structural impact of OFW [Overseas Filipino Workers’] remittances and to a lesser extent of the BPO [business process outsourcing] sector not only on the [Philippines’] external payments position, but also on GDP [Gross Domestic Product], particularly PCE [personal (or private) consumption expenditure],” his email said. “As always, I appreciate a little space in your precious blog. Thanks.” (Yeah, right.) So here you go, another piece by Arnold.]

THE Bangko Sentral ng Pilipinas (BSP) forecast of a seven to eight percent growth in the country’s gross domestic product (GDP) this year is the boldest official pronouncement yet of what’s in store for the domestic economy this year.

Speaking before members of the country’s organization of business journalists, BSP Gov. Amando M. Tetangco Jr. said GDP growth would come in faster than the 34-year record of 7.3 percent last year given the uneven growth trajectories of the advanced economies on the one hand, and their emerging peers on the other.

The BSP chief also pointed to higher interest rate differentials, which have benefited emerging markets in terms of a greater share of capital flows.

In fact, monetary authorities recently raised their forecast for the country’s balance of payments (BOP) to reach $6 billion to $8 billion this year, and our gross international reserves (GIR) to hit a record $70 billion.

Aside from these international developments, Tetangco pointed to the BSP’s macro-prudential measures, which have prevented asset bubbles from emerging in the Philippines.

According to the governor, asset valuations in the country have yet to reach bubble-like proportions because of the strong underlying macro-fundamentals and the BSP’s prudent regulatory framework, which has provided safety valves and has channeled resources to those sectors that most need them.

All these local developments have contributed to the country’s low and stable inflation, in stark contrast to the surge in prices among neighboring emerging markets.

This is why, the BSP insists, they are not behind the curve as far as monetary tightening is concerned.

According to our monetary authorities, the Philippines has been among the few countries that have enjoyed positive real interest rates, thus requiring no policy tightening despite the return of what appears to be the inflation surge of 2008 all over again.

In the Philippines, inflation last year averaged 3.8 percent, at the low end of the central bank’s target of 3.5 to 5.5 percent.

A crucial factor explaining this low inflation environment is the country’s ample GIR, which in turn is a function of the Philippines enjoying BOP surpluses in recent years.

Last year, our GIR grew by 40 percent to $63.608 billion from $45.591 billion in the same period in 2009, reflecting a new record high.

The country also registered a BOP surplus of $14.403 billion, or 124 percent higher than the 2009 surplus of $6.421-billion. The 2010 surplus was more than $6 billion higher than the revised $8.2-billion forecast for the period.

Largely contributing to this whopping performance was the rebound in exports, as global trade flows recovered from the slump of the previous two years.

In the particular case of the Philippines, two other factors that led to the robust external payments position were the resilience of overseas Filipino worker (OFW) remittances and the country’s growing share of the outsourcing and off-shoring market.

Money sent home by OFWs rose to a new record of $18.763 billion, slightly exceeding the BSP’s forecast of $18 billion for 2010.

As for the country’s share in the global outsourcing pie, anecdotal evidence points to the Philippines’ lead as far as employment levels in the call center segment alone are concerned.

What the two phenomena — rising OFW remittances and call center employment — suggest is that the Philippines not only has strong sources of foreign exchange besides the traditional external trade of merchandise goods.

Equally, if not more important, is that the country has a steady and growing source of dispensable income, which fuels personal consumption expenditure (PCE), heretofore the main engine of Philippine economic expansion.

That PCE didn’t contract owed to the steady income of these two demographic groups — OFWs and call center agents.

They are the heroes who helped prop up the Philippine economy amid the worst global financial crisis in decades, and — we suspect — the same groups that would sustain our growth this year and well into the medium term.

Companies are aware of the two groups’ economic influence, and have since deployed their marketing efforts to corner a piece of their incomes.

We hope the government likewise would realize this potent force that has prevented the domestic economy from unraveling during the depths of the recent global crisis.

From where we stand, the OFWs and call-center workers most likely will be responsible for a big chunk of the bold economic growth forecast set by the BSP.

When in Rome

When in Rome, ape the locals.
Or go native.
Or at least try to act like you know your way around.
This is not difficult, especially for Filipino tourists visiting the Eternal City for the very first time.
Filipinos, after all, are to cultural adaptation as the Chinese are to producing pirated DVDs. And just like illegally-copied video discs, the said Filipino trait remains unfettered by regional restrictions.
But then again, this trait — as far as Rome goes — appears to be irrelevant.
Romans are still likely to be irritated whenever strangers interrupt their routines by asking them for directions.
Just like sharp-tongued New Yorkers, Romans have perhaps nurtured a dislike for tourists, simply because their city has too many of them, Filipinos or otherwise.
Besides clogging buses and trains, these visitors delay pedestrian traffic by reading street signs, studying maps, and posing for pictures.
How does it feel like to live in a city absolutely swamped with visiting foreigners?
I barely have an idea.
I live in a city notorious for being the Philippines’ squatter capital and I’m pretty sure that that’s not a top tourist attraction.

This picture was taken in Rome after being awed by the Fiat 500.

This picture was taken in Rome after being awed by the Fiat 500.

What I do know is that for the first half of 2006, approximately six million people visited Rome. The Philippines — which is 60 times larger than Rome — only had 2.8 million visitors during the same year.
So what does this mean?
There is a shortage of Romans patient enough to give directions to the next bus stop while there is a surplus of Filipinos — at least 30 to a tourist — all too willing to answer any questions under the sun, proud of their abilities to communicate using broken English, complemented by various hand and facial gestures.
This discrepancy posed a problem for my wife and I when we were about to leave Rome and the bus we needed to catch was running late.
If we missed the bus to the train station, it might take awhile before we could board a train to the airport. A later train to the airport might mean a delayed connection to Paris, compromising the last stop of our European adventure.
We had become so desperate that we considered taking a cab. The idea was quickly dismissed when I learned that it might cost me an arm, a leg, and my other organs, unsavory and otherwise.
Why was the bus late?
I didn’t know but I was tasked to find out.
Armed with my poor English speaking skills and my atrocious Italian, I ambled to the station attendant and asked when was the bus arriving.
She answered me in broken English and then she shooed me off.
Was this racism?
Were my questions being dismissed outright because I wasn’t white? Was I making a fool of myself because I didn’t know how to speak their language properly? Was I being treated unfairly because I was overweight and therefore used more soap than thin people?
I didn’t know.
But I found out soon enough.
As I sat beside my wife in the waiting area, I saw various other tourists — some of whom spoke in English — getting the same treatment that I got. They asked the same set of questions that I asked but they were summarily dismissed, like appeals of lawyers with losing court cases.
Not long after, the bus arrived, making us consider the incident with some measure of fondness. (We did catch the plane to Paris, after all).
My wife and I loved Rome — we still do — despite having stayed for less than a week. And no bus station attendant, no matter how ill-tempered, was about to ruin that memory for us.

(This piece was written after a trip to Europe in 2007. It was finished more than a year later when a temporary alcohol shortage prompted me to do something else on a Saturday night. It was also published in GMANews.TV)

Book Review: Poverty of Memory by Renato Redentor Constantino

HOWEVER cleverly written, newspaper columns have never been given a decent break.  Treated as the poor cousin of the essay, opinion columns and other similarly-configured pieces of writing have been disallowed membership into the literary club.  Which perhaps explains why in the early nineties, Adrian Cristobal decided against asking fellow columnist and current Makati representative Teodoro M. Locsin Jr. from writing the foreword of Pasquinades, a collection of Cristobal’s pieces printed in the weekend supplement of the defunct Daily Globe, of which Locsin was publisher.  “…I believe that a collection of newspaper columns in book form is sheer vanity: what is perishable—and newspaper pieces are perishable—should be allowed to perish without benefit of clergy,” Cristobal said in his book’s introduction. “[B]eing a ruthlessly honest writer, [TeddyBoy] might go at it too well for my comfort, and I happen to perversely value his friendship more than his honesty.”  Although Locsin was able to defend himself in a speech he delivered at the book’s launch which was later published in the Philippines’ Free Press, their witty exchange emphasized the amorphous position occupied by well-written, non-straightforward news pieces published in dailies, weeklies, and some glossies.  Are such pieces simply just passing fancies, perishable goods to be consumed today and discarded tomorrow? Is there a clear demarcation between the non-fiction piece written under a tight deadline as opposed to the one that was produced leisurely?  An easy enough answer is provided by American critic Cristina Nehring in a May 2003 Harper’s Magazine essay.  “[T]here is only good writing and bad writing, strong thinking and weak thinking,” she said, in a piece entitled, Our Essays, Ourselves: In Defense of the Big Idea.  Going by the Nehring protocol, the collections and anthologies of a number of Filipino writers are not going to lose their luster anytime soon. Besides the work of Cristobal and others, among these anthologies include Renato Redentor Constantino’s The Poverty of Memory: Essays on History and Empire.  With four sections discussing an impressive array of topics—an American anti-imperialist group protesting US annexation of the Philippines to a profile of Iran’s pro-poor prime minister Mohammed Mossadegh—Constantino’s collection is more than just a samples of good writing and in-depth research. It is proof that combining talent, tenacity, and noble intentions can do more than just beat deadlines: it can stimulate ideas, widen perspectives, and help propose alternatives to the current local millieu, which has only helped to deepen oppression, encourage mediocrity, and tolerate ignorance.  In “The vitamins of Erma Geolamin,” Constantino relates the life and times of a domestic helper who has spent 14 years in Hong Kong only to find out later that the money she sent home was squandered by her husband who has been living with another woman.  “Another familiar story…It’s like the relationship between overseas Filipino workers and the Philippine government,” Constantino says, referring to the larger, menacing yet often-overlooked form of squandering: the Philippine government’s automatic provision of using precious dollars earned by the likes of Geolamin to pay for fraudulent, graft-tainted debt, exemplified by the Bataan Nuclear Power Plant (BNPP). These automatic debt payments, Constantino adds, is “a monumental barbarity that re-exports the dollars remitted by overseas Filipino workers.”  While also celebrating the achievements of these unsung Filipinos, Constantino nevertheless offers a few rules for those intending to secure a brighter future for everyone.  “Rescuing tomorrow from those who wish to appropriate it carries some requisites,” he says in the introduction. “History must penetrate memory. Memory must permeate history. Act deliberately but with dispatch. Understand. Listen. Reach out. Act with others. Rescue tomorrow together. Hope abounds. “The future’s already here,” said the writer William Gibson. “It’s just not widely distributed yet.” Thankfully, in less than 300 pages, Poverty of Memory succeeds in its attempt to enrich and enliven Filipinos’ collective consciousness.


This shortened version of a longer unpublished review will finally see print in the March 2 issue of Personal Fortune, the monthly magazine of Business Mirror, a Philippine broadsheet