by teodorico t. haresco
The Philippines is a survivor, surmounting challenges on our own in past centuries, without outside help. Leapfrogs in progress, achieved despite cultural, political, or economic hindrances, show we can weather turmoil. This certainly applies in the current global economic meltdown. Characteristically, we will survive.
Formed in early 16th century colonial times, when formerly united coastal peoples in Sumatra, Borneo, Peninsular Malaysia, and Sulu-Mindanao broke from an archipelagic whole into separate states – the latter becoming part of the Philippines. As one of Asia’s youngest members in this Pacific Century, we stand to gain the most, being the most resilient, having learned from our older “siblings”.
Unconnected to the Asian mainland, the Philippines never really benefited from the socio-economic influences of the great Chinese and Indian civilizations, unlike Vietnam’s 10th Century Duong Dinh Nge Dynasty; Indonesia’s 10th Century Javanese kingdom, and Cambodia’s 12th century Khmer Empire. At the time we were a motley collection of islands. Yet by the 19th century, we had jumped to living in stone houses and having some exportable crops. But our words, like “Tagalog” (taga-ilog), “Capampangan” (riverbank dwellers), “Bukid-non” (mountain dwellers) and “Tausug” (people of the waves), still reflect our archipelagic separateness and cultural divisions.
500 years ago, we were never a nation; we were never great. Under this regime, we will finally be united; the advent of more ports, airports, and other infrastructure linking our islands...and our peoples. Our Golden Age will come.
Looking In, Looking Out
Let us not be too harsh on ourselves. Our “crab mentality” stems from a Southeast Asian precapitalist trait of “redistributive economy;” looking after our personal tribe by taking what we can and distributing it accordingly. Young as we are, the entrepreneurial instinct to grow the business and employ people is underdeveloped – unlike in “matured” civilizations like China or India. Instead, we underscore a peculiar trait of spreading wealth to relatives and village. Observe our OFWs returning to home villages – a spiritual return to birthplaces – after long intervals.
Yet in spite of this, we have fared relatively well: during the 1960’s, we leapfrogged to become Southeast Asia’s 2nd largest economy, following Japan. The peso-dollar exchange was Php2: US$1; and, unlike Metro Manila, no metropolises existed in Jakarta and Kuala Lumpur…just jungles outside their capitals.
The current economic meltdown shaking the US, is perhaps caused by what McCain labeled on CNN as "the reckless…corruption and unbridled greed..." Former Fed chairman Greenspan recently proclaimed it the worst economic situation “in 100 years…” including the Great Depression?
As global panic sets in, infecting even us, the Administration, with consistent sound fiscal policy and judgment, stands firm. We should too. Like before, the 21st century will see us emerge on top, despite the current meltdown.
Our competitive advantage and most unique export, the OFW, will rescue us. The top 10 deployments are US (4M), Saudi Arabia (2M), Malaysia (637k), Canada (438k), UAE (450k), Japan (260k), and UK, Italy, Mexico and Taiwan (200k each). These contribute a weighted average (the DFA projects US$18B in remittances by end-2008, up 20% from 2007’s US$14.4B) from a basket of currencies, resulting in an “industry” more resilient and profitable than any developed country’s manufacturing sector. That basket of mixed currencies alone is insurance against Meltdown volatility, and helps defray our imports (US$55.5B, 2007).
Our economic outlook is therefore better. Double-digit OFW deployment and remittance growth, an estimated US$840B in untapped Mining potential, proven oil reserves of 138 million barrels, and positioning as the potential Asian tourist hub, plus relatively cheaper costs, will leapfrog us. We’re better off than the beleaguered US, and export manufacturing-dependent countries, like China, Japan and Korea. The storm hasn’t abated, but crisis brings opportunity. The following enumerates how we can keep the money moving.
7 Anti-Meltdown Tips
Think Entrepreneurial. Your business supplements cash flow while employed, and supplants it, when retired. The trick is what to get into: it could boom or bust. Business loans stimulate the economy; and fight economic stagflation.
Stock up. Buy stocks, local and US. Falling markets indicate a major “buy” signal. Look for bargain-priced blue chips, like Apple and Google. Buy early though, for when you see the bandwagon, it’s already too late.
Buy land. Land values generally appreciate (barring major catastrophes). Placing your money in this safest investment may protect you from volatility. You may lose however, if you need immediate cash, so invest truly surplus funds.
Extend your sentence. Delaying retirement brings steady income, and benefits. Work means security and productivity, at any age.
Invite Foreigners. Simply put, tourists bring dollars (US$5B in 2007), livelihood, and investments; stimulating economies in local areas.
Lose Weight. Sell idle assets – the third Rolex, the antique chair, the weird painting. Cash is king; it slumbering in so-called “investments” is lost opportunity.
Save. Money? Definitely, but also on energy, food, rents and other expenses, too.