53:1

They did it!  They finally did it!  And in record time too.  Maybe not record time. Six months.

The peso has finally dropped to 53:1! Isn't that exciting? Back in February they gave the inevitable until sometime throughout the year to happen.

http://business.inquirer.net/246320/peso-weaken-541

The peso may weaken to 53 against the US dollar through next year but this is a “manageable” adjustment necessary for the country to address infrastructure bottlenecks and sustain a higher growth path, a top economist of Ayala-led Bank of the Philippine Islands (BPI) said.

“The golden age of infrastructure didn’t happen last year but we expect a significant amount to kick in this year,” Neri said, adding that spending on midterm elections would also allow growth to breach 7 percent in 2019. 

But with the Philippines catching up with all the capital spending needed to build new roads, bridges, power plants, railways and telecommunication infrastructure, importation of capital goods has expanded at a faster pace relative to exports, thereby widening the trade deficit. 

“The peso is underperforming once again and let me convince you that this is for very good reasons, very valid reasons, only partially political. Most of it is because the Philippines is one of the most exciting, most interesting economies in Asia, if not in the global economy, today,” Neri said.

The Golden Age of Infrastructure© did not begin last year but we can expect a SIGNIFICANT amount to kick in this year?  Really? How many of these projects have actually been implemented and are right now in the stages of construction? If the country is lacking workers how can the Golden Age of Infrastructure© even begin?

https://www.philstar.com/business/2017/09/17/1740032/infra-projects-lack-skilled-workers

Anyone with a modicum of sense knows that these economists are full of it. Read what Budget Secretary Diokno has to say.

http://news.abs-cbn.com/business/06/11/18/peso-nears-53-vs-1-economic-managers-not-worried

Diokno said a weak peso would increase the value of dollar remittances from Filipinos working abroad. Trade Secretary Ramon Lopez said a weak peso would make local goods cheaper for buyers abroad.

If there is one thing commendable about Diokno it is that he has not strayed off message. From 2016:

http://news.abs-cbn.com/business/09/28/16/weak-peso-good-for-exports-remittances-finance-dept-says

"While the peso has moderately depreciated in nominal terms in recent weeks, the peso in real terms is still very strong, which deters competitiveness," said Finance Undersecretary Karl Kendrick Chua said. 

Finance Undersecretary Gil Beltran said the peso was just seeking its appropriate value given its significant appreciation in previous years. 

Budget Secretary Benjamin Diokno, meanwhile, downplayed the impact of the peso's weakness against the US dollar, instead saying the recent slide could benefit local exporters and Filipinos receiving money from their relatives working abroad. 

"The peso is not deteriorating. It just moved a bit," he said. "It is good for OFW (overseas Filipino worker) families so it will boost aggregate spending." 

Has the weak peso been good for exports?

http://business.inquirer.net/250523/breaking-ph-exports-6-imports-6-8-q1

NO!! Exports are down.

Has a weak peso been good for the families of OFWs?

https://www.rappler.com/business/204113-inflation-rate-philippines-may-2018

http://www.gmanetwork.com/news/money/economy/656569/peso-depreciation-to-drive-inflation-yet-good-for-philippine-exports/story/

NO! Inflation is up.

Exporters and families of overseas Filipino workers, as well as dollar earners are obviously going to benefit from a weaker peso, said University of Asia and the Pacific (UA&P) School of Economics Dean Cid Terosa. 

‘It will be good for those earning and sending dollars to the Philippines. Also, exporters will benefit because their products will be cheaper in the world market,” he said. 

Terosa cautioned, however, that a depreciating peso causes inflationary pressures. 

“For the general public, the weakening of the peso can translate to higher domestic prices—since prices of imported goods in pesos will move up. This can add to inflationary pressures,” he said.

Don't be confused by this headline. Exports are still down. But for those who are able to export their goods being able to trade on a weak peso will be good for them because foreign buyers can buy more Philippine goods for cheap but whose currency will still have to be traded in for a depreciated peso? That means a weak peso is more beneficial to foreigners than exporters! Is having your OFW family member sending you dollars really going to benefit you if domestic prices are higher? 

Why do these people keep insisting that a weak currency is good? Weakness is strength! It's reminiscent of 1984 albeit with all the terror replaced by a sublime stupidity.

My favourite analysis must be this one already quoted above:

Finance Undersecretary Gil Beltran said the peso was just seeking its appropriate value given its significant appreciation in previous years. 

Seeking its appropriate value? Like a man looking for the right gal. What significant appreciation in previous years is he talking about? Here is the ten year trend you tell me how Beltran's statement is  not utterly preposterous! Tell me how this trend of depreciation which began in 2013 is anywhere near temporary! When will the peso find its appropriate value? Just what is its appropriate value?

https://www.xe.com/currencycharts/?from=USD&to=PHP&view=10Y

Maybe you are saying, "Shut up you aren't an economist." It's true. I am not an economist but I do know when someone is lying and these men are lying. I bet behind closed doors they are pulling their hair out in worry. Nah. On second thought these men are wealthy and will never have to face the hardships so many in this nation face.

They don't care.

The Old Trash Collecting Lady

She came through the neighbourhood out of nowhere. I was standing outside my house talking to a neighbour and all of a sudden I saw her lugging her bag of glass and plastic over her shoulder like Santa Claus with his sack of toys. She set the bag down next to a tree and wandered off while I brought out some extra glass and plastic bottles for her to carry away.

Where will she go? What will she do with all the bottles? Sell them? It can't be much to live on. I've seen scavengers often enough which indicates there must be a trade in glass and plastic. What else will she do for a living? There is no place for her in the Build Build Build economy. No matter how much a government administration says it is for the people many will always get left behind.

Retards in the Government Special Edition: Inflation

In American politics there is an old saying, "It's the economy, stupid." In Philippine politics there is a similar saying, "It's the stupid economy." Actually I just made that up. Kind of like how it seems the Philippine government is making up it's economic policies as it goes along. Let's look at a few headlines and see how this story is developing.

The inflation numbers for February were released recently and they were a bit high.

https://www.rappler.com/business/197498-philippines-inflation-rate-february-2018

But not too high.

http://news.abs-cbn.com/business/03/06/18/espenilla-faster-february-inflation-in-line-with-expectations

Bangko Sentral ng Pilipinas Governor Nestor Espenilla said Tuesday the rise in consumer prices last month was "in line" with expectations. 

The consumer price index rose 3.9 percent in February, higher than 3.4 percent in the previous month based on 2012 prices. The January CPI was computed using 2006 costs. 

"The elevated February inflation figure is in line with our updated forecast for a temporarily higher inflation than target range in 2018 due to transitory factors," Espenilla said in a statement. 

"Our forecast remains that inflation will decelerate back to well within target in 2019 whether based on 2006 or 2012 index," he said.

The message is don't panic. Everything is fine. We have taken factors into consideration and were expecting the inflation rate to be higher. It's a hiccup and will adjust itself soon enough. 

But even though this is expected to be temporary the BSP said they were going to investigate to see if policy changes were warranted.

http://www.gmanetwork.com/news/money/economy/645644/bsp-to-study-if-inflation-rate-calls-for-policy-change/story/

“The operative word is temporary. How temporary is temporary is what needs careful analysis,” he said.

Yes how temporary is temporary? Is it perhaps four more years? That is the time Duterte has left in office and much of the recent economic rollercoaster has been attributed directly to his infrastructure programs.

https://www.reuters.com/article/us-philippines-economy-infrastructure/dutertes-build-build-build-plans-hit-philippine-peso-idUSKBN1AM01R

With these projects on the fast track imports of capital goods have increased, exports have decreased, and the peso continues to weaken. 

http://business.inquirer.net/247402/trade-gap-widened-3-32b-january

The surge in imports had reversed the current account to a deficit, which had the market worried and pulled the peso weaker in recent months. 

At end-January, the peso depreciated to 51.341:$1 from end-2017’s 49.958:$1. 

A component of the balance of payments, the current account was expected to swing to a $100-million deficit in 2017 from the $600-million surplus in 2016 amid the government’s push to ramp up infrastructure investments leading to a surge in imports of capital goods. 

This year, the current account deficit is seen to swell to $700 million. 

Economic managers had said that as the administration embarked on the “Build, Build, Build” infrastructure program and with expectations of sustained robust economic growth, demand for imports would remain strong in the near term.

The peso has been weakening slowly and steadily since 2016. Despite that fact economists have been quick to reassure everyone that this is only temporary and that it is actually a good thing.

http://news.abs-cbn.com/business/10/02/17/peso-weakness-vs-dollar-temporary-bdo-unibank

The peso's decline to 10-year lows against the dollar is "temporary" and does not signal trouble for the economy, an analyst said. 

A weak peso also makes the Philippines more attractive to foreign investors, Ravelas said. 

"The weaker peso, in the eyes of foreign investors, makes it cheaper for them to invest in the Philippines," he said. 

"A weaker peso is good for OFW families because they have more money to spend," he said.

Could the weak peso be one of the reasons the Philippines has been listed as the number one country to invest in in the world? If so then that means any growth in foreign investment will also be temporary.

According to the DOF the weak peso is one of the reasons for increased inflation.

http://business.inquirer.net/247358/dof-blames-weak-peso-profiteering-high-february-inflation

Beltran also said “only a little less than 10 percent could be attributed to excise tax adjustment under TRAIN.”

If there is one thing the government does not want to blame for inflation it is the TRAIN bill which has raised excise taxes and increased consumer prices.

The TRAIN law is only 2 months old so it would be better to give it a few more months before it's impact can truly be assessed but it does seem as if it is having a negative impact on the economy and contributing to the rising inflation. And after all the reassurances that the February numbers were just fine now the narrative is that inflation will continue to rise.

https://business.mb.com.ph/2018/03/11/inflation-likely-to-stay-above-4-bsp/

The average inflation rate for this year will exceed four percent and breaking the government target, based on data and trends that the Bangko Sentral ng Pilipinas (BSP) keeps track of for the 2018 path. 

“The BSP expects inflation, using the 2006-based CPI (consumer price index) series, to average slightly above four percent in 2018,” according to BSP Governor Nestor A. Espenilla Jr. 

Espenilla has already stated that despite breaking the target, inflation will not top five percent for this year and that average inflation “is expected to return to within target range in 2019, settling slightly above the midpoint of the same target range.”

Will the rising inflation be temporary? Will the rate not top 5% this year? I doubt the DOF and BSP can say this without a note of caution on their tongue. After all this is the same song they have been singing about the peso since 2016.

http://business.inquirer.net/211439/peso-weakness-seen-as-temporary

The peso’s weakness amid a stronger US dollar following the United Kingdom’s “Brexit” vote will only be temporary even as the local currency hit its weakest level since the national elections here last May. 

On Monday, the peso closed at 47.03 to $1, the softest close since hitting 47.09 last May 6, the last trading day before elections were held on May 9. It was also weaker than last Friday’s close of 46.95:$1, which reversed gains made the previous day. 

If election jitters weakened the peso more than a month ago, the UK’s vote to leave the European Union last week was to blame this time. 

But moving forward, the peso is seen bouncing back amid a robust domestic economy.

The peso at 47:1 was alarming enough to some people but now that it is at 52:1 I don't think we can call it's weakness temporary.  Nor do I think the positive forecasts of these economists cant be taken with anything but a grain of salt.

The Philippine Basketball Association is an Advertising Gimmick

Basketball is so popular and important to the national consciousness of the Philippines that in 2014 special legislation was passed making NBA player Andray Blatche a Philippine citizen just so he could play on the national team during the FIBA World Cup because having a tall black American on the team would surely guarantee winning the championship.

https://www.washingtonpost.com/news/early-lead/wp/2014/05/27/welcome-to-the-philippines-andray-blatche-is-granted-citizenship-to-play-for-countrys-national-basketball-team/

The Philippines did not win the FIBA World Cup.

Nevertheless basketball remains an integral part of Filipino culture. But there is one crucial difference between basketball in the Philippines and basketball in the USA: there are no city-name teams!

In fact all the teams in the Philippines are corporate owned entities that represent a brand. They are a part of the marketing and advertising arm of each corporation.  Check out these brands, I mean teams:

Rain or Shine Elastometric Waterproofing Paint

Pure Foods Hot Dogs

Batangas International Port

Alaska Powdered Milk

San Miguel Brewery

It's a genius move for any advertiser. Filipinos are consumed with basketball and by watching these teams the brands are constantly in their heads. The sheer cost of running a team are made up by the returns in sales and reduction in advertising overhead. Don't take my word for it.

“It’s an advertising vehicle first and foremost,” PBA Operations Director Rickie Santos told BusinessWorld in an interview, wherein he discussed the intricacies of owning a PBA franchise.

“In the PBA [companies] have advertising mileage. We have the television coverage. We have the radio coverage and the newspapers. On game day itself there are already stories, which we call ‘advancers.’ Then the game stories,” Mr. Santos said. 

He said that while it takes no small amount of money to maintain a PBA franchise -- P100 million alone for a franchise fee apart from the operational costs -- companies however are not left short-changed. 

“What teams spend on their operations are already part of their advertising costs,” Mr. Santos said. 

http://www.bworldonline.com/content.php?section=Weekender&title=pba-as-a-marketing-platform&id=101335

An outsider would laugh and scoff at the team names and the whole set up but not Filipinos. In the Philippines the marriage of basketball and advertising is normal.

What do fans think of team names in the PBA? Do they cringe, or at least chuckle, when an announcer introduces the Burger King Whoppers? Hardly: These are just the names of companies and products that pop up in everyday life. Bartholomew, who was introduced to the PBA when doing a Fulbright in the Philippines, says that he found the names to be distractingly amusing at first, but that they have come to seem normal enough. 

https://www.theatlantic.com/business/archive/2016/05/philippine-basketball-association-weird-team-names/484733/ 

Exposure to any situation long enough will lend a semblance of normalcy. While there are pluses about having corporate sports (would there even be professional basketball teams in the Philippines if they weren't owned by corporations?) there is also a big minus.

The marriage of basketball and advertising reduces the relationship between the teams and the fans to one that is purely economic. Each corporation has converted the athletes into its paid wage labourers. Each player becomes a salesman when he wears his branded jersey.  Athletic ability is cultivated not for its own sake but because winning games translates into sales.  The need to be selling its constantly expanding product lines causes each team to frequently change its name with the advent of a new product to sell. With corporate teams there is no rooting for the home team or hometown pride for having a winning team. Rather, the corporations have torn away from basketball its sentimental veil, and have reduced the team-fan relation to a mere money relation.

Is this how Filipinos want to be thought of?  As degraded entities whose essential value lies in their function as consumers? To have the game of basketball falsified into a means of consumption? Must everything in this country be a lie? 

Filipinos may not care or have even given it much thought but the current PBA system is dehumanising and can only be called sport in the most peripheral way. To quote the PBA Operations Director once more:

“It’s an advertising vehicle first and foremost.”