Country in fiscal crisis. Total collapse in 3 years.

[kiper]

Ay naku..natawa na lang ako. Si GMA pa mismo ang nag-announce huh.. Gusto nya lang maisa-batas agad ung mga New TAX Scams nya. She should be more conservative..nag-atrasan na naman tuloy mga yagbols ng mga investors..tsktsk

[jolog1]

If you check on the rate our treasury bonds are doing, they are quite good. That means that the amount of confidence that the investors have in us is still concrete.

That's not exactly true. Government sells bonds to raise money to balance the deficit. They sell them at a high rate of interest because no one would take them. It's risk vs. return. The risk for bond buyers is great because Philippines' debt rating is poor. Many times the treasury department offered bonds that no one would take, hence the high rate of interest today. High rate of interest usually indicates high risk.

This is why banks na tagilid, like Banco Filipino, offers the highest interest rate on their time deposit - it's because sane people already know BF is on its way down. Stable banks are not as desperate to attract buyers.

[wowiesy]

Originally posted by jolog1
That's not exactly true. Government sells bonds to raise money to balance the deficit. They sell them at a high rate of interest because no one would take them. It's risk vs. return. The risk for bond buyers is great because Philippines' debt rating is poor. Many times the treasury department offered bonds that no one would take, hence the high rate of interest today. High rate of interest usually indicates high risk.

This is why banks na tagilid, like Banco Filipino, offers the highest interest rate on their time deposit - it's because sane people already know BF is on its way down. Stable banks are not as desperate to attract buyers.

i agree on this observation.... shopping around for loans.. i notice that BPI usually offers the lowest interest... pero grabe naman sa higpit sa mga requirements!! the newer banks are not so strict in terms of the requirements (para mas attractive umutang) although mas mataas ang babayarang interest...

[cyberdoc95]

Originally posted by explorer
FPJ should rejoice that he lost the elections!
Updated 01:02am (Mla time) Aug 23, 2004
By William Esposo
INQ7.net


THE great Renaissance French philosopher Michel de Montaigne had aptly put it: “There are some defeats more triumphant than victories.” As the country’s problems start to unravel, I can imagine Fernando Poe, Jr. (FPJ) starting to smack his lips to relish all the misery he had so narrowly missed in the aftermath of defeat. Indeed, insofar as President Gloria Macapagal-Arroyo is concerned, not all you wish for can be all that good.
From day one, Gloria Macapagal-Arroyo had inherited trouble. Barely four months after she succeeded Joseph Estrada in January 21, 2001, the supporters of the disgraced leader staged a violent assault which almost brought her to the same fate of her predecessor.

Cory Aquino had her coup attempts and four terms later, Gloria Macapagal Arroyo had her Oakwood Incident. Corruption scandals hounded her no end, capped with the worst and most serious of all – Sen. Panfilo Lacson’s Jose Pidal expose which took husband Mike Arroyo before the Senate Blue Ribbon Committee. To my recollection, Mike Arroyo was the only presidential spouse to ever have to face the legislative probe body.

Yet in comparison, the problems Macapagal-Arroyo had to face during her first four years in Malacanang are trifling compared to the series of crises of tsunami proportions looming on the Philippine horizon.

There is the foreign debt and the deficit. Financial experts and businessmen predict that the Philippine peso may reach P70 to US$1 because of these. Taipan Lucio Tan, in fact, at some time said that the peso could hit P100 to the US$1! Macapagal-Arroyo may not have been solely responsible for the enormous foreign debt or the deficit that were accumulated through three decades under the terms of four previous presidents. But that is hardly any consolation considering that the full impact of the untidy mess will take place under her watch.

There is the continued rise of oil prices that raises the prices of just about everything along with it. Contrast that with the state of the economy and the inability of workers to get any form of substantial salary increases – and it does not take a genius to see that this is an issue that could easily spill over to the streets with unpredictable results.

There is the sudden blurring of relations with the United States after Macapagal-Arroyo decided to withdraw the Philippine contingent in Iraq to save migrant worker Angelo de la Cruz from decapitation. We have seen how US President George W. Bush had taken personally the rejection of France and Germany to join his Iraq misadventure. It would then logically follow that he would also employ every means at his disposal to drive home his displeasure over the Philippine troop withdrawal – from nullifying promised financial packages to out-and-out pressure and/or retaliation.

Any patriotic Filipino will no doubt support her decision to save the life of Angelo de la Cruz and would also want a better level of relationship – from the current ‘master and vassal’ – between the US and the Philippines. Still, this finds Macapagal-Arroyo in the situation of losing the one ally who could have played a key role in alleviating her presidential woes.

As if the tsunamis of our Philippine condition are not enough, Macapagal-Arroyo now even faces the threat of a power crisis in the next two years akin to the one that had plagued the Aquino term. It takes at least three years to put up a power infrastructure, that is, if you manage to lure in investors to plunk in the huge capital. Again, Macapagal-Arroyo did not create the power crisis – Ferdinand Marcos did with his slew of miscalculations and erroneous decisions in addition to the failure of subsequent administrations to install meaningful and long-term alternatives. Now she must grapple with worse power conditions than that which beleaguered her predecessors Cory Aquino and Eddie Ramos.

The political opposition must surely be seeing the reality of the imminent mega crises and chooses instead to stay uninvolved knowing that all this can well be the beginning of the end. Why be blamed for the collapse? Why be accused of being a plotter cum de-stabilizer the way opposition voices are invariably branded by the administration? Remember what Napoleon said: “Never interrupt your enemy when he is making a mistake.”

Certainly, FPJ would be in no position to even come close to tackling any of these crises. His total lack of academic preparation and job experience does not inspire confidence, to say the least.

But the question is – is Macapagal-Arroyo up to it? In terms of preparation for the job and work ethic, Gloria Macapagal-Arroyo rates an A. What worries me is how she handles crisis and her style of governance.

Macapagal-Arroyo likes to solve problems through accommodation. She won the elections by taking accommodation to the extreme. Her K-4 coalition is a melting pot of recruits from opposing political sides. Her new cabinet is mostly the result of accommodation. The trade offs and rewards are quite evident.

Now the problem is – horse-trading and accommodation will not get you through the debt, deficit, power and high prices crises. These are ‘black and white’ problems needing unequivocal solutions. Playing footsy just to please can be deadlier than irreversible gangrene. There just aren’t any grey areas for accommodation.

The relationship with the US is easier to address. Give the Americans enough pounds of flesh and the carrots will start flowing again. The problem will be if the Filipino nation will agree to the conditions of the trade. In the Angelo de la Cruz crisis, the country would not trade a lowly truck driver for all the incentives of the spoils of war in Iraq.

A student of history will think that for crises of such proportions as what Macapagal-Arroyo now faces, surviving the tempest will require:

1. A resolute leader of such political will as Abraham Lincoln who held the American nation together and preserved the union of the states during the American Civil War.

2. An inspiring leader who can galvanize and unite the nation through a period of ordeal and sacrifice like no less than what Winston Churchill did for Britain during World War II.

Unfortunately, based on the track record of the last four years, these are leadership qualities where Gloria Macapagal-Arroyo is very much wanting.

Her last four years were marked by division within her very own ranks, a rudder-less style of governance that shifted direction with every wind, deepening public cynicism and loss of faith in the political leadership and the very system itself. Macapagal-Arroyo must metamorphose into these leadership qualities of a Lincoln and a Churchill if she is to register a passing mark in history.

Greatness is not genetically derived. It is a result of the strength of character molded by crisis and the principled choices one makes in life.

If FPJ is rejoicing, then I personally beleive that the entire Filipino people should rejoice that he did not win the election. Can you imagine what could he have done if he won the election? Philippines has chosen the right person to tackle the economic crisis who is an economist herself. No amount of good acting would solve the financial difficulty if FPJ won the election.

Most of the filipino communities here in the States have high hopes for the Philippines to get up from her knees and regain good shape and everybody thinks that GMA is the right person for the job.

What really disappoints me is about the news that the Senate does not beleive that there is a crisis. Are they in denial? I think they should come down from the clouds and see whats really going on. Palibsaha kasi, they are on their luxury cars going to the senate building and go home to their multi-million peso mansions.

My two cents!

[JAYarc]

imho lang, media must be responsable by limit, or block issues that will caused panic and dollar holding..

imagine if people get panic! result mass account withdrawal, panic buying= spontenous downfall hehe..

[mazdamazda]

Originally posted by explorer
btw, when did most of the car assemblers in the country closed their plants here? toyota, ford, nissan, volkswagen, chrysler, GM closed their plants in 1983 just a few months after ninoy's assasination and when the peso value went down from 7 to 14. so expect an unprecedented mass labor lay-offs once we have a deep dive in peso value versus the dollar.

on the contrary - if the peso devaluates this will make our country more viable than China for manufacturing industry that requires cheap labor.

btw, I didn't think that we experienced "mass labor lay-offs" when the Peso devaulated during the Asian crisis? as I remember, from P28 it plunged to P45.

[explorer]

Originally posted by mazdamazda
on the contrary - if the peso devaluates this will make our country more viable than China for manufacturing industry that requires cheap labor.

that's not true. among the asean counrties, we are on the lower level of productivity. we can't beat china in terms of productivity. china is an exporting country with thousands of products to mention, philippines has a few list of them and most of the raw materials are coming from abroad.

Originally posted by mazdamazda
btw, I didn't think that we experienced "mass labor lay-offs" when the Peso devaulated during the Asian crisis? as I remember, from P28 it plunged to P45.

peso was only drag by the asian currecy crisis. peso was supposed to be the most stable asean currency at that time, but because philippines had a lot of trade relations with asean, we could not avoid the peso to be devaluated. although the peso devaluated at that time, the investors' confidence in the country was strong. in fact we were the tiger ecomy at that time (FVR time) and there was no huge budget deficit.

[zero]

prepare for brownouts too before 2006-2007,
walang bagong powerplants na ginagawa ang gov't. at nalalaspag na naman ang mga old & existing powerplants sa country.

[boydapa]

matagal ko na sinasabi magdeclare na tayo ng bancruptcy o insolvency ayaw maniwala ayan presidente na nagsabi pinalabnaw lang pananalita fiscal crisis lng daw. dyos ko inspite of all these may positive thinkers pa pala, hwag na tayo maglokohan sa dami ba naman ng magnanakaw sa gobyerno natin sa tingin nyo makakatakas pa tayo sa pagreremata ng banko. etong gobyerno naman lahat na isinanla na, binenta na nga tayo mga pilipino pati kaluluwa pati bansa pa ba? kng baga sa pamilya malapit na maremata bahay papalayasin nlng tayo. at yun mga tao naman na may kagagawan kng bakit tayo nahaharap sa ganyang sitwasyon asahan nyo nasa abroad na yan mangunguna pag nangyari ang tuluyang pagbagsak. wala yan pinagkaiba rin sa building na nagcollapse sa maynila we can see it coming kaya layas na habang tumatagilid palang! buti pa yun iba dyan may one way ticket out of this god forsaken country...

[Auto_Xer]

During the early 80's the peso went from ~8:1 to about 20+:1 then 35:1 coming back down to as low as 25:1 before going up to 45:1 then to it's current rate.

Back then it was panic, because until that time, the peso never experienced a devaluation as drastic as that in so short a time period.

Imo, bawasan na lang nila shady deals nila, halos ovrernight mawawala yung debt