The Philippine peso: Strongest currency in Asia! GOOD NEWS

[Rance]

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For those who wanted to pull down the government are making shame of us Filipinos.. we need to do something good for our next generation! para atong mga anak naay maayong kapa ingnan.. In the next five years basta mo undang na ang mga opposistion ug samuk2x para lang sa ilang personal interest we have a good chance that our economy will prosper! GO PINOY!

Philippine peso … the strongest currency in Asia :mrgreen:
PHILEQUITY CORNER By Ignacio B. Gimenez
The Philippine Star 10/24/2005

Despite all the political noise and the attacks against President Arroyo, the peso remains one of the strongest currencies in Asia and the world. The peso rallied strongly against the US dollar last week to close at 55.43 — making it the best performing currency in Asia year-to-date (with the exception of the renminbi whose peg to the dollar was removed last July). The major reasons for the peso strength are the following:

1) Supreme Court’s final decision to uphold the EVAT,

2) The strong capital accounts surplus,

3) The announcement by the Department of Finance of a balanced budget by 2008,

4) BSP increasing overnight rates, which is in tandem with the Fed rate increases.

Note that most major currencies like the euro and the yen are down more than 11 percent against the US dollar.

The rate hike last Thursday supported the strengthening of the peso and quelled threats of possible portfolio outflows due to the narrowing interest rate spread with US treasuries. This is also a preemptive move on the part of the BSP in response to higher global inflationary expectations (due to high oil prices) and price pressures that may arise from the implementation of EVAT.

Although the timing of the recent rate increase came as a surprise to most, we believe that it is appropriate given the US Fed’s stance of monetary tightening. Other countries such as Thailand, Indonesia, South Korea and Canada have made similar moves in a bid to keep inflation on target and their currencies stable.

Even European Central Bank (ECB) chief economist Otmar Issing recently commented that central banks have to be "extremely vigilant" against inflation sparked speculation. This is a clear signal that the ECB may soon raise its policy rates which have been kept steady at two percent for over two years now.

In our view, the objective of a tamer inflation and a more stable peso will more than compensate businesses for the effects of the modest increase in interest rates. Besides, the BSP has been very accommodative in their monetary policy. Real interest rates (interest rates adjusted for inflation) have been hovering in negative territory for more than a year now.

The strong balance of payments and capital accounts is another major reason for the peso appreciation. The countries balance of payments position amounted to $2.73 billion for the first nine months of 2005 compared to a deficit of $176 million a year earlier.

Remittances from our OFWs are up 28 percent to $7 billion in the period January to August. In August alone, remittances reached $954 million — the highest ever recorded for a single month.

Meanwhile, portfolio inflows in equities and bonds have supported the turnaround of the capital accounts. Net portfolio investments surged to $2.02 billion for January to September 2005 compared to $191.7 million last year. This is clearly a stamp of approval on the country’s fiscal reforms. Without the reforms, the exchange rate could have gone beyond P58/$1 by now solely on the strength of the US dollar against the global currency basket.

The strongest inflows came in during the first four months of the year with March posting the biggest with $562 million. However, the delay of the passage of the EVAT and afterwards the delay in its implementation have shrunk net portfolio investments in subsequent months. In June, only $31.6 million flowed in due to the TRO on VAT. We expect this to pick up again once the EVAT is implemented in November and reinvigorates the country’s fiscal reform program.

Talking about fiscal reforms, the Department of Finance is doing a good job in its bid to balance the budget by 2008. For the period of January to September 2005, the budget deficit amounted to P108.5 billion, down 24 percent year-on-year and well ahead target. Revenue collections improved by 14 percent while expenditures remained prudent with only a 6 percent for the same period.

Another important measure worth noting is the primary fiscal surplus (computed by removing interest payments from the fiscal balance). This measures the ability of the government to pay off the principal of its loans. The January to September primary surplus stood at P126.8 billion, up 122 percent year-on-year and well ahead of government’s target of P96.7 billion.

Note that the benefits from the EVAT have yet to kick in. Meanwhile, the increase in excise taxes (on cigarettes and liquor) which took effect in January 2005 has not yet been fully captured since most manufacturers have front-loaded their inventories during the prior year.

There is also overall improvement in the consolidated public sector deficit which declined by 55.8 percent to P41.6 billion in 1H05. This is attributed to the P1/kwh Napocor increase and the 121 percent increase in surplus of the state-owned pension funds. With the expected implementation of the EVAT in November, we expect this improving trend in the CPSD to continue in 2H05 and into 2006.

We would like to thank the Supreme Court for its enlightened decision in upholding the EVAT law. As we have always said, we are one with the investment community, the credit rating agencies and multilaterals such as the World Bank and IMF in supporting immediate and full implementation of EVAT.



Oil Prices Have Dropped

The price of oil dropped below $60/barrel level last week. The peso appreciated also last week. The drop in the price of oil and the improvement in the peso should mitigate any inflationary effects of the EVAT. These developments all the more reinforces the stand of Finance government that the EVAT should be implemented soon.

The government continues to get criticisms from different sectors. However, the peso remains strong, Philippine bonds are resilient and the capital accounts positive. Either the government is doing right or the fund managers are wrong. But fund managers are usually astute investors and have the talent of looking at the overall picture. Perhaps, the Filipino or the common "tao" and many in the media are looking at the trees and not the forest.

Many Filipinos tend to undermine themselves or sell their own country short. As it is, the investment community is looking positively at the Philippines, and they are encouraged by our economic numbers.

It is clear that we are on the path towards fiscal recovery. While a balanced budget is a long way to go, what’s important is that we have turned around and the trend towards improving our fiscal position continues. As for investors, they should be looking at investing in Philippine assets (the peso, ROPs, equities) now that we are on the path towards a balanced budget by 2008… not when everything is rosy by 2009. Despite all the negativism, we are bullish on Philippine assets in the long term.

[tolstoi]

BAD NEWS to the PRO-OPPOSITION and cummies

[bossdak]

basig gi kontrol na nila ang exchange rate mao nga sa 55 ra ga dagan-dagan ang rate...


ot

may lang gani ang kilo sa humay tag 20+ lang gihapon......

[JoRed]

Flawed deficit figures prove unreliability of gov't data to show true economic picture
Date Posted: 8.5.2005






FLAWED DEFICIT FIGURES PROVE UNRELIABILITY OF GOV’T DATA TO SHOW TRUE ECONOMIC PICTURE



Government recently revealed once again how its economic data cannot be trusted to provide a true picture of the country’s economic situation. The country’s trade deficit figures for the past three years were reported to be significantly underdeclared after government said it made major revisions to imports and exports data.



For 2004, the trade deficit was revised to $4.3 billion from the $713 million figure earlier reported by the National Statistics Office (NSO). The 2003 and 2002 trade deficit figures were likewise revised to more than $4 billion. For these three years, the cumulative trade deficit was understated by over $10 billion.



According to independent think-tank IBON Foundation, this only spells more bad news for the country’s balance of payments (BOP) position. For a dollar-dependent economy, a bigger trade deficit means fewer dollars to pay for the country’s imports and debt payment.



Economists said the revisions raised further doubts about the reliability of Philippine economic data after previous major revisions. Trade deficit data for 2000-2001 had earlier been revised.



That Philippine economic data is not reliable should not be surprising given how the Arroyo administration is using revised methodologies to conceal harsh realities about the economy. For example, the National Statistical Coordination Board (NSCB) has reduced the poverty threshold several times to decrease the number of poor Filipinos and obscure the true extent of poverty in the country. The NSO has also redefined unemployment to reduce the count of unemployed workers.



Further, the Department of Finance has removed intra-government borrowings as a part of the outstanding public sector deficit (OPSD) to reduce public debt figures, while the Bangko Sentral ng Pilipinas (BSP) has added a 20% “raising factor� to hike overseas Filipinos’ remittance estimates and improve balance of payments accounts.



These changes not only make the identification of trends difficult by making current data incompatible with previous years’ estimates. More significantly, they serve to conceal government’s failed policies that have worsened the country’s economic situation. (end)


LOOK AT ECONOMIC INDICATORS THAT REALLY MATTER



Despite so-called economic growth, the average annual unemployment rate is one of the highest rates recorded in the last half-century, underemployment rate is the highest in almost two decades, and accelerating inflation pushes the daily cost of living ever higher.



By Sonny Africa





IBON Features--Presidential Management Staff head Rigoberto D. Tiglao correctly said that the economy is important in understanding the political storm surrounding Pres. Gloria Macapagal-Arroyo. But to be able to understand the roots of the overwhelming dissatisfaction of the people with the President, it is most important to look at the indicators that really matter.



The country’s workers, peasants, odd-jobbers and low-paid public and private employees are worse off now in 2005 than 4 ½ years ago when Ms. Arroyo took the presidency. Longstanding problems of poverty, inequality, joblessness and pitiable social services have deepened. Combined unemployment and underemployment in the second quarter of the year is at a record high. Prices of basic commodities, petroleum products and water and power services have been inexorably rising. These are very real economic failures.



Despite so-called economic growth, unemployment has been rising since Pres. Arroyo took over the presidency in 2001. The average annual unemployment rate rose from 11.1% in 2001 to 11.8% last year which is, apart from the 12.8% rate in 1985, the highest recorded in the last half-century.



There were 4.8 million unemployed and 8.4 million underemployed Filipinos in April 2005 according to the last Labor Force Survey (LFS), or a combined 13.2 million Filipinos either jobless or otherwise still looking for additional work. This is the most number of unemployed and underemployed the country has ever seen.



The worsening unemployment problem has even been obscured by methodological sleight-of-hand in April 2005. The National Statistical Coordination Board (NSCB) adopted a more stringent definition of unemployment that reduced the official unemployment rate by 4.6 percentage points and the number of unemployed by 1.9 million. These Filipinos did not get jobs. Rather, by administrative fiat, they were no longer considered part of the labor force and so weren’t considered unemployed even if they remained as jobless as ever.



This sorry lack of jobs is aggravated by the serious deterioration in the quality of the jobs to be had. The number of underemployed, or those with jobs but still seeking additional work, drastically increased to 26.1% in April 2005 from 18.5% last year. This underemployment rate is the highest in almost two decades and the 8.4 million number of underemployed a near-record high.



That more Filipinos are struggling to eke out livelihoods or are putting up with whatever jobs are to be found is not surprising. Falling inflation rates since the mid-1990s reversed under the Arroyo administration, and prices have been rising with increasing rapidity in the last 3 ½ years. The inflation rate, or the speed at which prices are rising, has risen to over 8% in the first half of 2005 from a whole-year average of 6% in 2004. Monthly inflation rates since the last quarter of 2004 are already among the highest in the past decade.



Accelerating inflation has pushed the daily cost of living for a family of six ever higher, up to P629.10 in the National Capital Region (NCR) and an average for the whole Philippines of P517.60. The implied daily cost of living per person here is far higher than the absurdly low poverty line of P33.60 per person per day that Sec. Tiglao used to claim that poverty incidence has gone down to 24.7% in 2003. By more decent standards, at least 80% of the population must be considered poor.



The rising joblessness and falling real incomes increase pressure on publicly provided services. Unfortunately real spending on social services– i.e. taking inflation into account – has been drastically falling under the Arroyo administration. Comparing the period 2001-2004 with the four years before it, real spending on education has fallen by 3.2%, health spending by a large 24.5% and housing spending by a severe 61.0%. The impact would be even worse if population growth is factored in.



Social services have been increasingly crowded out by debt servicing in the national government (NG) budget. Interest payments on debt have steadily increased as a share of the NG budget from 24.7% in 2001 to a projected 33.2% in 2005. To make room for this, education’s share over the same period has fallen from 16.6% to 14.9%, health’s share from 1.8% to 1.4%, and housing’s share from 0.3% to 0.2 percent. This budget deprioritization of social services hits the poor, or those most dependent on publicly provided social services, the worst.



Malacañang’s economic managers can continue with their glowing commentaries on the supposed strength of the economy under Pres. Arroyo, but this would be an exercise at clutching at statistical straws that few are likely to believe. IBON Features

[pandisal]

Yah, until the government spoon feed all the people and give all the poeple house and lot for free,.. you'll never gonna be happy!

[dmantilla]

The price of oil dropped below $60/barrel level last week.

Maayo ni, maayo unta ug dili na mota-as pag ayo ang pletehan kay wala raba gyud ntawon ning taas ang sweldo..mao lang gihapon..

[Rance]

@JoRed This is something to ponder on. Please send this to your commanders and Kasama.Â* This wil give them thoughts on what separates facts from fictions. Thanks

[JoRed]

'bay Rance,

Â* Â* Â*exactly my point! pls. read an excerpt of my previous post & discern.


Accelerating inflation has pushed the daily cost of living for a family of six ever higher, up to P629.10 in the National Capital Region (NCR) and an average for the whole Philippines of P517.60. The implied daily cost of living per person here is far higher than the absurdly low poverty line of P33.60 per person per day that Sec. Tiglao used to claim that poverty incidence has gone down to 24.7% in 2003. By more decent standards, at least 80% of the population must be considered poor.



The rising joblessness and falling real incomes increase pressure on publicly provided services. Unfortunately real spending on social services– i.e. taking inflation into account – has been drastically falling under the Arroyo administration. Comparing the period 2001-2004 with the four years before it, real spending on education has fallen by 3.2%, health spending by a large 24.5% and housing spending by a severe 61.0%. The impact would be even worse if population growth is factored in.



Social services have been increasingly crowded out by debt servicing in the national government (NG) budget. Interest payments on debt have steadily increased as a share of the NG budget from 24.7% in 2001 to a projected 33.2% in 2005. To make room for this, education’s share over the same period has fallen from 16.6% to 14.9%, health’s share from 1.8% to 1.4%, and housing’s share from 0.3% to 0.2 percent. This budget deprioritization of social services hits the poor, or those most dependent on publicly provided social services, the worst.



Malacañang’s economic managers can continue with their glowing commentaries on the supposed strength of the economy under Pres. Arroyo, but this would be an exercise at clutching at statistical straws that few are likely to believe.

[JoRed]

pahabol...


SPICED-UP ECONOMIC NUMBERS CAN’T HIDE CRISIS





It’s not the numbers that matter, especially if the numbers are prettied up.



The Arroyo administration has been citing positive economic figures to deflect its political crisis, but according to IBON, these statistics are unreliable as government changed various methodologies this year to come out with rosy figures.



According to IBON senior researcher Sonny Africa, adjusting these methodologies tries to hide the true extent of the country’s economic crisis.



He says that an early notable change was in the low adjusted poverty thresholds used by the National Statistics Office (NSO) in computing the country’s poor in 2003. NSO came out with an unrealistic poverty threshold figure of P12,267 or P33.60 a day and claimed that only 1 in 3 Filipinos were poor.



“Even the ADB questioned this adjustment and argued that this would underestimate the poverty incidence,� says Africa. IBON estimates that as much as 88% of Filipinos may be poor.



Africa adds that there have been three statistical redefinitions this year: 1) National Statistical Coordination Board’s redefinition of unemployment, which reduced unemployment rate; 2) Department of Finance’s removal of intra-government borrowings from the computation of the outstanding public sector debt, thus reducing public debt figures; and 3) Bangko Sentral’s adjustment in its accounting method to include a 20% raising factor in OFW accounts and improve the balance of payments figures.



He explains that the objective of changing methodologies is to conceal from foreign creditors, business groups, and the public the true picture of the Philippine economy. For instance, NSCB’s more stringent definition of unemployment in the April 2005 survey has reduced the official unemployment rate by 4.6% and the number of the unemployed by 1.9 million.



“But this was achieved not by creating jobs but by simply removing those no longer actively seeking work from the ranks of the unemployed, in order to make it seem as if fewer Filipinos are out of work,� says Africa.



These changes will make it more difficult to identify the trends and make comparisons with estimates from previous years, he adds.



“But a pretty economic picture can’t hide the extent of the economic crisis that Arroyo’s economic policies have brought,� Africa says. “No amount of statistical deception can hide the reality that Arroyo has failed to deliver any real economic gain for the people.� (end)

[FK]

will it goes to show that with or without GMA we can still survive.

and if this is all true and the forecast will come true... I hope mapiskan ang basic public services, dili ra kutob news report.