DOLLAR RESERVES FALL TO 19-MONTH LOW

The country’s gross international reserves (GIR) fell to a 19-month low in January on the back of the central bank’s foreign exchange operations. Bangko Sentral ng Pilipinas data showed the GIR slid to $78.939 billion last month, more than $4 billion below its $83.187 billion level seen in December 2013. The latest GIR figure is the lowest after June 2012, when international reserves summed up to $76.13 billion. “The decline in reserves was due mainly to the foreign exchange operations of the BSP and payments by the National Government for its maturing foreign exchange obligations,” the central bank explained.

ALSO: A 7.2-percent growth rate and no marching bands?

The Philippines, if we go by the NEDA numbers, is now part of a short, short list of global economic overachievers. The 7.2 percent growth rate last year was phenomenal by any benchmark and reckoning, given the sense of triumphalism in countries that barely got out of crippling stagnation. Why was the announcement of a stellar economic performance last year met with a baffling, perplexing kind of indifference? And why was the amazing feat reported by a minor Palace—and not by the president who customarily crows about such stellar figures? The hard truth is this. The Palace is truly afraid that none of the chest-pounding and gloating would resonate with the general public. It would not even enhance the institutions of democracy, as Justice Brandeis put it succinctly. You can’t have both plutocrats—all powerful and immensely wealthy—and a functioning democracy. The two are irreconcilable. The Palace, for starters, will be hard put in explaining who benefited from the gains generated by the stellar growth performance. Doing so would force the NEDA to create a simple graph that would track, through Xs and Ys, what income gains in 2013 went to the top 1 percent and the top.01 per cent. Thirty percent? Forty percent? Sixty percent?....MORE,


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Dollar reserves fall to 19-month low

MANILA, FEBRUARY 10, 2014 (PHILSTAR) By Kathleen A. Martin - The country’s gross international reserves (GIR) fell to a 19-month low in January on the back of the central bank’s foreign exchange operations.

Bangko Sentral ng Pilipinas data showed the GIR slid to $78.939 billion last month, more than $4 billion below its $83.187 billion level seen in December 2013.

The latest GIR figure is the lowest after June 2012, when international reserves summed up to $76.13 billion.

“The decline in reserves was due mainly to the foreign exchange operations of the BSP and payments by the National Government for its maturing foreign exchange obligations,” the central bank explained.

It noted, “These outflows were partially offset by the foreign currency deposits of the Treasurer of the Philippines, income from investments of the BSP and revaluation adjustments on the BSP’s gold holdings.”

The GIR shows a country’s ability to pay its foreign debt and for imports of goods and services.

The January level is enough to cover 11.3 months’ worth of imports of goods and payments of services and income.

At the same time, this is equivalent to 7.9 times the country’s short-term external debt based on original maturity and 5.6 times based on residual maturity.

Net international reserves or GIR minus short-term debts, meanwhile, also declined to $78.9 billion in January from $83.2 billion in December.

The BSP has forecast the GIR to reach $88 billion this year based on its balance of payments assumption.

However, BSP Governor Amando M. Tetangco Jr. has said the actual level may sum up between $86 billion and $87 billion on the back of revaluation adjustments.

MANILA TIMES COLUMN

A 7.2-percent growth rate and no marching bands? February 8, 2014 10:39 pm by Marlen V. Ronquillo SUNDAY STORIES


Marlen V. Ronquillo

The Philippines, if we go by the NEDA numbers, is now part of a short, short list of global economic overachievers. The 7.2 percent growth rate last year was phenomenal by any benchmark and reckoning, given the sense of triumphalism in countries that barely got out of crippling stagnation.

The Cameron government in England, still plagued by bad fundamentals, has been beating its chest for barely getting out of what seemed to be a permanent slump.

There is a sense of relief in prostate Greece and overeager pundits are now talking about a possible rebound. In reality, there is not much going on there, except for a few choice bonds that returned over 100 percent last year.

These were essentially short-term market movements and never the general positive macroeconomic picture.

Yet, there is now plenty of talk of a “Great Rebound.”

Ireland is also in some sort of a chest-pounding binge and there are optimistic projections of a 2.1 percent growth for 2014. Still, the general picture remains bleak. Why there is rejoicing in a context of a 12 percent unemployment rate, we do not know. Perhaps this is the “new normal” —rejoicing over nothing.

Which brings us to this question.

Why was the announcement of a stellar economic performance last year met with a baffling, perplexing kind of indifference? And why was the amazing feat reported by a minor Palace—and not by the president who customarily crows about such stellar figures?

The two figures—a 7.2 percent growth rate and a 6.7 percent unemployment rate—merited some Madison Avenue type media rollouts. Because very few countries in the world had done the same and achieved the same.

Why, we have to ask this, were the marching bands quartered on announcement day?

The hard truth is this. The Palace is truly afraid that none of the chest-pounding and gloating would resonate with the general public. It would not even enhance the institutions of democracy, as Justice Brandeis put it succinctly. You can’t have both plutocrats—all powerful and immensely wealthy—and a functioning democracy.

The two are irreconcilable.

The Palace, for starters, will be hard put in explaining who benefited from the gains generated by the stellar growth performance. Doing so would force the NEDA to create a simple graph that would track, through Xs and Ys, what income gains in 2013 went to the top 1 percent and the top.01 per cent. Thirty percent? Forty percent? Sixty percent?

The Palace can aggregate the gains of the Top 20 percent to show a more equitable society but that can be exposed as a sham by merely extrapolating the gains that went to the 1 percent and the.01 percent.

Explanatory journalism, not the usual puff jobs about how great the plutocrats are, is still an infant field but some people with conscience are going into it.

A media rollout would make it easy for critics to point out that in the rural areas where agriculture is the only economic activity, growth was almost stagnant, as it has been over the past several decades and in these areas the vast masses live wretched lives. Farming areas would only receive news of a great economic performance with extreme incredulity, if not with scoffing disbelief. I know what I am talking about.

In the barrio where I farm, 90 percent of my farming neighbors joined the aquaculture craze about ten years ago. They borrowed jumbo loans (their version of jumbo loans is anywhere from P250,000 to half million pesos) to build tilapia ponds in former cassava/sugar raising areas. I cautioned them about the perils of borrowing money to engage in a type of farming that we don’t know about. I even told them that even the fishpond operators along the Pampanga River had been losing money over the unpredictability of the water supply. What more of ponds that have to suck water from underneath using pump and plenty of diesel?

I made a rough computation that showed this figure to them: ten years from now, you will have to declare bankruptcy. To the left of me, to the right of me, and everywhere I look, what I said ten years ago had been proven true now. Former tilapia farms carved out of areas devoted to crops have been overrun by cogon patches.

The rural banks are now moving in to foreclose.

Those who have stuck to rice and sugar and the traditional crops have fared slightly better but that is just saying slightly better than bankruptcy and losing your land to the banks.

It is useless stating whatever happened to the typhoon-ravaged farms in Bicol and the Visayas, and the farming areas wrecked by late 2013 and early 2014 heavy rains in Mindanao.

The 6.7 unemployment rate was mostly driven by service industry-type jobs that don’t even pay the minimum wage. The fast-food chains and the malls generally pay slave wages, with no tenure and auxillary economic benefits that come with full employment.

The labor unions have been eviscerated. What is current now is a right-to-work policy that bypasses the unions.

The BPO workers are not even covered by the current Labor Code.

The middle class—meaning the OFWs—is physically absent from the country and does not function in your normal center.

The 7.2 growth rate offered no lift except to a tiny slice of Philippine society—income gains vacuumed upward. On second thought, the Aquino government was right in letting the announcement just pass.

A sense of triumphalism would have been like toxic salt rubbed on open wounds.

5 Responses to A 7.2-percent growth rate and no marching bands?

  1. Tinoy says:

    What is very alarming is that the present administration is not concern about the problem of the unequal distribution of wealth. One proof can be seen already at what is happening now in the Aquino’s clan Cohuangco’s Luisita Hacienda where agrarian reform implementation is biased against its tenants. What is important to the regime now is its image projection like when the GDP’s high rating is announced to the world and the impending resolution of the Peace Accord with the Bangsamoro by hook or by crook even there are other Muslim entities not included in the peace talk and the disregard of the Tripoli peace treaty not to mention the facilitator’s (Malaysia) vested interests (Sabah issue, extracting oil at Sabah territory, etc.).

  2. Harry says:

    great article and even better follow up comments – just a small point on the 6.7 unemployment rate…how does the government work out this statistic? who are included, housekeepers? nope, taxi drivers, not really..tricycle drivers..I dont think so, farmers, casual drivers, small business / sari sari stores of course not, dentists, lawyers, doctors, accountants, probably not, men gambling their female OFW remitted salary?. Surely if there is no process to ‘register’ as unemployed as in developed countries then there is no way to tell?? In summary, I truly believe the ‘unemployment rate’ should be either about 80% (if you take the number of eligible workers and then ratio the number of income tax payers?), or 0% because everyone must have some kind of income producing ‘job’. Love to know how its done, down to the tenth of one percent as well!

  3. 99% of the growth rate of 7.2% or net of 7.1% is the generic growth of the businesses of JAZA, ABOITIZ, LOPEZ, DANDING, SYS, CONSUNJI, RAZON, ONGPIN TYS, GOTIANUM, GOTIANUM, LUCIO, CO among dozen others. Hindi po kasali ang 99% ordinary pinoys. Mga isang milyong katao lang po ang may pakinabang o nakinabang dyan at pirming kasama ang lahat ng pamilya ng naupong Presidente, Senador, Justices, Cabinet Secretaries at syempre mga provincial Warlords.

  4. art sarga says:

    A democracy can only function if the majority belongs to the middle class. In our case, the middle class is dwindling. The productive middle class are employed abroad because of lack of opportunity and destructive politics in the local scene.

    Left in the country are the few ultra- rich, who suck all the wealth in the country and the great struggling poor masses who live for bare existence. The poor are not gainfully employed, they toil, like brother to the ox, in the haciendero’s farm or in the taipan’s mall.

    This creates a slanted eco- growth pattern… the poor getting poorer, and easier to be manipulated by the rich; the middle class number decreasing or leaving the country in droves, while the ultra -rich multiply their in wealth and political clout year after year.

    This is not democracy.

  5. Andy R Samson says:

    GDP is always measured in terms of expenditures and funds appropriated and rarely have anything to do with completed infrastructures that may contribute to economic well-being and “feeling” good about the quality of life. The releases of funds (SARO) in the last quarter certainly jacked up the economy even as PH suffered the Bohol 7.2 Richter Scale earthquake and the humongous Yolanda/Haiyan devastation. Even the NSO revealed that there are now 1.2 million more families who rate themselves poor and falling right smack into the poverty incident rate of those making both ends meet with less than $2 per day; only 40 big names are responsible for 76.5% increases in GDP and their incomes rose by 37.9% in 2012. The PH government has been running a deficit since 1999 and its Debt/GDP ratio is greater than 50% and just yesterday, the BSP reported that the GIR went below to $79.+ billion from a record high nearing $85 billion recently. Even to an ignoramus, the decrease would indicate some due debt payments may have been made or the BSP went in to intervene and rationalize the inflation reeking at 4. 2% that sent FOREX trading to near PhP 46 per USD.


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