BOO CHANCO: SECOND THOUGHTS ON STRONG PESO?
MANILA, March 13, 2006 (STAR) DEMAND AND SUPPLY By Boo Chanco - NEDA Chief Romy Neri was reported to have lamented being a lone voice in the Monetary Board in batting for a BSP intervention to moderate the strong pesoís continued rise against the dollar. Neri wants the BSP to start buying dollars from the market once the peso breaches the P50 to $1 level in order to protect exporters.
The Neri proposal was nixed by the BSP and for a good reason too. "Buying dollars will be inflationary because we will be infusing liquidity (putting more pesos) in the system," BSP Deputy Governor Diwa Gunigundo observed. It is the BSPís position to just let the peso seek its own level. But it is no secret that the BSP intervenes whenever the market becomes too volatile, but it would never admit it officially.
Thatís interesting. Both Neri and Gunigundo are right, in a way. But itís interesting Neri is ringing the alarm bells on the strong peso. Up until now, Ate Glue and her spokesman Toting Bunye are citing the strong peso as something good for the economy and the Filipino people. I have written in this column that it is not that cut and dried. The exchange rate should not be used as an indicator of economic health.
Before some people who do not understand economics start chastising me again for being habitually critical of Ate Glue, let me say here that on a personal basis, there is nothing I like most than a strong peso. With my children living abroad, I have dollar obligations to meet. If I was only thinking of myself, I would out-do Alex Magno right now in singing praises to Ate Glue for the strong peso (which incidentally, Ate Glue had little to do with, anyway).
But there are larger things than my personal interest and it is my obligation to point out why it is wrong to mislead the public that the strong peso is the best thing that ever happened to this country since EDSA 2. Then again, I donít have to work too hard at it now. Romy Neri has spoken up, and as the administrationís representative in the independent Monetary Board, he is presumably speaking for the government of Ate Glue. If only Romy would take five minutes to straighten out Toting Bunye, that would be good public service.
How long will this strong peso be around? No one really knows. There are too many variables involved. It may happen that the BSP really need not do anything because the market itself will bring the peso down. Just last Friday, the peso fell in what was described as "the biggest fluctuation of any currency" probably because foreign "hot money" investors in the local stock market are repatriating proceeds after they dumped local stocks over the last four days. "Hot money" in the local bourse had always been a heavy influence in the pesoís market value. But who knows? Last Friday could just be a blip and the peso in todayís trade may be back in its upward trajectory.
Blip or not, one thing is sure with a strong peso as far as our OFWs are concerned. They donít particularly like it. Because what they normally send back home buys less pesos now, our OFWs are forced to send in more dollars to their families here. Ironically, this further strengthens the peso. OFWs, our bagong bayanis, canít be happy with the strong peso.
Neither are exporters, specially the small and medium scale enterprises, happy. They donít have too much allowance to accommodate even small upward movements in the exchange rate. They are simply getting less pesos for every dollar of goods or services exported. How long they can last, is the next question to ponder.
So, maybe Romy Neri is right and the BSP should intervene the way the Chinese Central Bank manages the yuanís exchange rate. But as the BSP points out, they can buy dollars from the market, but at some risk to inflation going up as more pesos flood the system. If inflation goes up, interest rates will have to go up too and thatís not good for business either. Also, letís not forget that inflation is the worst form of regressive taxation there isÖ everyone paysÖ specially the poor.
The issue is clearly complicated and not easily used in an intelligent manner as a propaganda ploy. I just wish Ate Glue and her propagandists take note or the strong peso, specially if it starts hitting P49 to the dollar, could blow up in her face.
Filipino food abroad
More readers wrote to express their views on the question of how come there are no good Filipino restaurants abroad. Hereís one from Paul de la Cruz from Al-Khobar, Saudi Arabia.
Greetings from Saudi Arabia!
As a regular reader of your column, thank you for your article on "Pinoy Restaurants Abroad" as published on The Phil STARís issue of March 6, 2006, that Filipinos think it is too much hard work to keep a top class restaurant going (and that is true!) and it may also be that Filipino food is not ready for prime time.
I canít help sending you this email because I also noticed that even here in the Eastern Region of Saudi Arabia which includes Al-Khobar as the prime commercial/shopping area for Pinoy OFWs, we have to go to Thai restaurants if we have to celebrate special occasions like birthdays, "binyagan", or club meetings.
This is true even with the presence of Pinoy restaurants here with "homesick sounding names" like Manila, Chow Queen, Cabalen, Tokyo-Tokyo, Quick Chow, and Batchoy Restaurants.
I do not know the reason why but as you have said, that is true!
And hereís another one from reader Edison Dy.
Your article today regarding Pinoy restaurants abroad is quite interesting, I have been thinking the same since I travel often. I noticed that Pinoy restos abroad are mostly mom and pop, unknown, except to the local Pinoy community. The way I see it, the most important ingredient for a successful Pinoy resto is, customers.
Even if you set up a Gerryís Grill (which to me is real good simple Pinoy food) in the U.S. or Europe, it wonít last long since, not too many foreigners know of the Philippines. We have to admit, we arenít as popular as Thailand or even Vietnam. The really sad part is when Pinoys go vacationing abroad and crave for something local, they usually look for Chinese food.
I would not tweak Pinoy food to the international taste. Whenever I have German or French business associates coming over (which happens more than once a year), they usually get hooked on our lechon (the black forest also has their own version of lechon), adobo, crispy pata (like baked pigs knuckle), atchara (like sour kraut) and believe it or not kilawin (its like pickled herring).
Also authenticity is the only way you can earn a Michelin star in your resto abroad. In the U.K. there are Chinese and Thai restoís that have earned these coveted stars. I am sure a properly set up Pinoy resto can get one too.
Hereís a culinary experience that is one for the books. I am basically a sucker for bulalo. In Italian restaurants, I usually end up ordering Osso Buco. Last year I went to Stockholm, Sweden and decided to try a Michelin featured restaurant, Operakallaren (opera cellar), this was "THE" place to impress in Stockholm.
They had in their menu a specialty of the house, veal shank with some really fancy description, costing quite a bundle. I ordered it. When it was served, the presentation was really something to behold. Unfortunately my video cam was not with me. But at the end of the day, it was nothing but nilagang bulalo. O.K., it was good, slowly cooked for eight hours, the meat was so tender and tasty, the sauce and accompanying mashed potatoes were really yummy, the huge bone marrow was salted (at this point I wished I had some toyo and rice).
I think these guys would also like the bulalo served at Rose and Grace, which is a third the price of an order of Coke. In other words, Pinoy food is not all that strange to the Europeans.
Hmm, makes me wonder, maybe I should open a Pinoy restaurant in Europe. Only problem is the ingredients, most of our manufacturers are not HACCP compliant which makes export of ingredients to Europe and America impossible. Once again all you are left with are Thai made ingredients. How frustrating.
Done dealÖ next!
Hereís Dr. Ernie E.
A sixteen-year-old in labor was having a lot of pain, writhing on the bed, fighting her contractions, swearing, and refusing to consider epidural analgesia.
Streams of obscenities erupted from her room and the girl yelled F*CK right into the nurseís face.
With absolute calm, the nurse patted the girlís arm and said, "Youíve already done that part. Now itís time to have the baby."
Boo Chancoís e-mail address is email@example.com
Chief News Editor: Sol Jose Vanzi
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