VERY few people pay attention to the activities of the Bangko Sentral ng Pilipinas (BSP).
Which is a pity.
After all, it is arguably the most powerful institution in the Philippines.
While the Philippine presidency reigns supreme over the country’s armed forces-or at least theoretically-and all the agencies which control our public lives, the BSP does a far more important job. Not only does it help regulate the economy, the BSP can also print Philippine currency; currency that is no longer backed by gold or any other physical asset which can be bought or sold in world markets; currency that is honored only because of governmental fiat (which means that it is legal tender because the Philippine government says so. This explains why a P500 peso bill, although just a piece of paper with the face of Kris Aquino’s father on it, can be used to buy goods and services of the same amount).
This also means that theoretically, if it wanted to, it can go on printing money. Not that it will because it won’t. Doing so would only introduce more cash into the country’s financial system, causing demand for goods and services to increase, thereby making prices of commodities rise faster than expected. (Incidentally, the hike in prices is also one of the things it keeps tabs on.)
No thanks to our obsession with politics, celebrities, starlets, and the failure of media to further clarify economic issues, many of us-including this fairly irregular blogger-have failed to appreciate the crucial role that the BSP plays in our lives.
Take the banking industry’s interest rates, which is set by the BSP’s Monetary Board, perhaps the most powerful set of people in the Philippines.
Depending on its inclinations and perceptions, the MB by its say-so alone, can encourage or discourage local business activity.
If it decides to cut interest rates, making loans cheaper, it encourages investors, both foreign and local, to expand their businesses. After all, they can easily raise cash for their ventures since banks will be less stringent about lending money.
However, if the MB takes the opposite view, it can stunt the country’s growth. Businesses will be discouraged from borrowing money at higher rates and banks will be stricter issuing loans.
Unfortunately, whether the BSP decides to cut or raise rates at its regular meetings, the Filipino public-from whom taxes are collected and in whose name foreign debt is incurred, among others-has always been kept in the dark about how policies are formulated and implemented.
Being an agency considered as a cut above all the rest, the country’s central monetary authority is beyond the reach of a number of laws, the most important of which are those relating to the freedom of information.
Since it occasionally discusses the country’s cash position-a national secret and therefore a component of national security-the BSP can conveniently ignore a law say, covering the conduct of public officials.
According to the said law (Republic Act 6713), any government employee is duty-bound to reply to letters addressed to them within 15 days. They are also required to disclose copies of government documents within the same time frame upon request.
But then again, like most Philippine laws, these are all theoretical. Requesting copies of documents-especially sensitive ones-from government agencies are more difficult than slicing a piece of Jollibee’s Chickenjoy with Jollibee’s signature plastic knife.
Meanwhile, should you commit the mistake of requesting a copy of a document from the BSP, think again even before typing that request letter.
After all, the powerful body is allowed-perhaps even duty-bound-to ignore you legally.
Which explains why very little headway has been made about making the central bank’s decision making processes more transparent.
And it’s not just about interest rates.
This is about virtually every financial transaction that it undertakes, ranging from the amount of debt to be borrowed (whether it should be sourced from local banks or international lenders), the amount of loans to be paid (both foreign and domestic), the amount of foreign exchange to buy and sell (to defend the value of the peso from currency speculators), and, more importantly, the amount of dollar-denominated debts that Philippine companies can be allowed to borrow for their business expansion.
Since equipment used by local firms to produce goods and services are usually imported (i. e. transmitters which allow cellphone users to send and receive voice calls and text messages), businesses incur loans in US dollars-one of the generally accepted currencies around the world-to pay for these pieces of equipment.
Everytime Globe Telecoms or Smart Communications or any other local company announces intentions to borrow in dollars to buy equipment from abroad, they usually ask approval from the BSP. After all, since the equipment they require run into millions of dollars, these companies, for better or for worse, will use the country’s foreign exchange reserves.
In turn, the transaction increases the demand for dollars,
which may reduce the demand for the Philippine peso and in effect, lower its value.
The same principle goes for the country’s oil requirements.
Since the Philippines imports more than 90 percent of its crude needs, dollars are used to pay for them; the same dollars that nearly 10 million Filipino workers abroad send to their families at home.
So the next time you see a stereotypical Pinoy OFW, who may be garbed in what may well be the tackiest apparel ever since Kuya Germs donned an orange suit, think twice about calling up the fashion police.
After all, they literally help keep the Philippine economy afloat.
But this is just one of the moral lessons we need to learn about the story of the Philippine economy.
As a people, we need to realize that the dollars sent home by Filipinos abroad-many of whom are insulted, discriminated, oppressed, and even raped and tortured-are used to pay for fraudulent obligations; debts that were incurred to put up projects that never benefitted the Filipino people.
Take the Bataan Nuclear Power Plant.
Unsafe, unnecessary, and tainted with fraud, the P26 billion project, built in the mid-1970s, was paid for by the government, thanks to the endorsement what is arguably the Philippines’ most powerful institution, the Bangko Sentral ng Pilipinas.
It’s about time we take our economy and our country’s spending habits seriously.
Our money and by extension, our financial lives, are far too important to be left to officials of the BSP.
Monthly Archives: March 2007
VERY few people pay attention to the activities of the Bangko Sentral ng Pilipinas (BSP).
The answer seems yes, he should.
Or at least according to Kevin Hassett, the US economy columnist of the financial news service provider established by the current mayor of New York City. Hassett, in his recent column, said that Greenspan can still move markets, thanks to his arguably spectacular performance as US Fed chairman. When Greenspan told a Hong Kong audience that the US, the world’s largest economy, was moving towards a recession, stock markets tanked. (Incidentally, the equity plunge also led to a sudden sell-off in commodities since traders covered their losses from their gains in the rising prices of metals, among others.) Now, the question is, should he shut up and leave everything to Ben Bernanke, the current US Fed Chair? Or should he charge expensive fees (reportedly starting at $150,000 a head) to those interested in what he has to say? Neither, says Hassett. He should start a blog. Besides making the information public, Greenspan would also help Americans—and the world—understand the economy better.
Meanwhile, another Bloomberg columnist, Caroline Baum, said that while Greenspan has the freedom to talk more, people should listen less. In her recent column, she said that Greenspan should graduate from being a Who’s Who to a Who’s He?
However, Hassett’s proposal sounds better.
Not only will Greenspan enrich the online realm, it will also put many blogs, including this one, to shame. http://www.alangreenspan.org anyone?
Or so says the Associated Press, whose reporters “imposed” a ban on covering the hotel heiress for a week. Click here for
HOWEVER cleverly written, newspaper columns have never been given a decent break. Treated as the poor cousin of the essay, opinion columns and other similarly-configured pieces of writing have been disallowed membership into the literary club. Which perhaps explains why in the early nineties, Adrian Cristobal decided against asking fellow columnist and current Makati representative Teodoro M. Locsin Jr. from writing the foreword of Pasquinades, a collection of Cristobal’s pieces printed in the weekend supplement of the defunct Daily Globe, of which Locsin was publisher. “…I believe that a collection of newspaper columns in book form is sheer vanity: what is perishable—and newspaper pieces are perishable—should be allowed to perish without benefit of clergy,” Cristobal said in his book’s introduction. “[B]eing a ruthlessly honest writer, [TeddyBoy] might go at it too well for my comfort, and I happen to perversely value his friendship more than his honesty.” Although Locsin was able to defend himself in a speech he delivered at the book’s launch which was later published in the Philippines’ Free Press, their witty exchange emphasized the amorphous position occupied by well-written, non-straightforward news pieces published in dailies, weeklies, and some glossies. Are such pieces simply just passing fancies, perishable goods to be consumed today and discarded tomorrow? Is there a clear demarcation between the non-fiction piece written under a tight deadline as opposed to the one that was produced leisurely? An easy enough answer is provided by American critic Cristina Nehring in a May 2003 Harper’s Magazine essay. “[T]here is only good writing and bad writing, strong thinking and weak thinking,” she said, in a piece entitled, Our Essays, Ourselves: In Defense of the Big Idea. Going by the Nehring protocol, the collections and anthologies of a number of Filipino writers are not going to lose their luster anytime soon. Besides the work of Cristobal and others, among these anthologies include Renato Redentor Constantino’s The Poverty of Memory: Essays on History and Empire. With four sections discussing an impressive array of topics—an American anti-imperialist group protesting US annexation of the Philippines to a profile of Iran’s pro-poor prime minister Mohammed Mossadegh—Constantino’s collection is more than just a samples of good writing and in-depth research. It is proof that combining talent, tenacity, and noble intentions can do more than just beat deadlines: it can stimulate ideas, widen perspectives, and help propose alternatives to the current local millieu, which has only helped to deepen oppression, encourage mediocrity, and tolerate ignorance. In “The vitamins of Erma Geolamin,” Constantino relates the life and times of a domestic helper who has spent 14 years in Hong Kong only to find out later that the money she sent home was squandered by her husband who has been living with another woman. “Another familiar story…It’s like the relationship between overseas Filipino workers and the Philippine government,” Constantino says, referring to the larger, menacing yet often-overlooked form of squandering: the Philippine government’s automatic provision of using precious dollars earned by the likes of Geolamin to pay for fraudulent, graft-tainted debt, exemplified by the Bataan Nuclear Power Plant (BNPP). These automatic debt payments, Constantino adds, is “a monumental barbarity that re-exports the dollars remitted by overseas Filipino workers.” While also celebrating the achievements of these unsung Filipinos, Constantino nevertheless offers a few rules for those intending to secure a brighter future for everyone. “Rescuing tomorrow from those who wish to appropriate it carries some requisites,” he says in the introduction. “History must penetrate memory. Memory must permeate history. Act deliberately but with dispatch. Understand. Listen. Reach out. Act with others. Rescue tomorrow together. Hope abounds. “The future’s already here,” said the writer William Gibson. “It’s just not widely distributed yet.” Thankfully, in less than 300 pages, Poverty of Memory succeeds in its attempt to enrich and enliven Filipinos’ collective consciousness.
This shortened version of a longer unpublished review will finally see print in the March 2 issue of Personal Fortune, the monthly magazine of Business Mirror, a Philippine broadsheet
EXCEPT for drinking cold beer, ogling hot women and occasionally
scratching their private parts in public, perhaps no other obsession
has made more fools out of men than their preoccupation with gadgets.
Yes, gadgets, otherwise known as handy pieces of equipment, usually
electronic, significantly overpriced, and generally packed with
features so advanced these are ignored, and are often rendered
Whether mobile phone, laptop, handheld computer, or nosehair trimmer,
gadgets to most men have become more addictive than drugs, more
alluring than porn, and more stimulating than the promise of sizzling,
committment-free sex with any single one of the half-naked starlets
shaking their respective booties on what passes for primetime
television in this country.
Despite atrocious prices and poorly-tested software, brand new
devices continue to flood the market because companies which make them
know they will never run out of customers, mostly males consumed by
Unfortunately, the race for the latest and the greatest has always
been—and will always be—conquered by members of the moneyed class.
But this doesn’t necessarily mean that the rest of us—especially
low-income, deadline-beating deadbeats such as myself—need to turn
green from gadget-envy.
After all, the local market for second-hand, previously-owned gizmos
remains wide open. All it takes is a reliable internet connection to
find the equipment of your choice, enough mobile phone load credits to
quickly facilitate the negotiation, easy access to cash to consummate
the transaction, and some open-mindedness to ensure that the whole
undertaking is mutually beneficial.
Add some online savvy and you’ll be amazed to find out that Blanche
DuBois was right. Yes, Virginia, the mass of men who lead lives of
quiet desperation can rely on the kindness of strangers.
Last year, while looking for a new set of batteries for the already
obsolete Palm Vx, I managed to be put through a chief executive
officer of a medium-sized food processing company who happened to like
fiddling with old handhelds and talking at length with their users.
Less than a month after we first met, he not only gave me a spare set
of batteries, he also installed it himself, a process so tedious it
involves the use of—and I am not kidding when I say this—an iron.
Mr. CEO agreed to call it quits when I gave him a non-functioning
Palm IIIx, another handheld that I was only too willing to dispose of
since it gathered dust and animosity on my desk. (Nearly six years
ago, after I increased the PDA’s memory to eight megabytes from four,
the screen also had to be replaced, which cost me nearly the price of
a new unit. Thanks to my bad karma, the whole thing kicked the
electronic bucket shortly after.)
Anyway, since such mutually beneficial, non-cash transactions are
rare, in fact almost coincidental, nothing comes close to real-time
yet offline friends who also happen to be early adopters.
Willing to pay serious cash for the newest in technology, these
individuals will only find it too easy to let go of their
previously-owned yet well-maintained equipment at giveaway prices.
Take the Treo 650 smartphone I acquired early this year.
Besides paying less than half of what it went for when it was locally
introduced two or so years ago, the Treo package included a pricey
nylon case, a hands-free phone kit, a 1-gigabyte SD card, two sets of
chargers, an extra battery, a cradle, a spare retractable USB cable,
and tons of software.
But then again, the whole transaction remains the fringe benefit of
keeping close ties with my former UP professor, who writes a weekly
column for another newspaper.
During the mid-nineties, years before I became formally employed, the
professor sold me my first Mac, a 25Mhz PowerBook 520 which he
previously owned and which I paid for in six monthly installments.
Not long after, acquiring his hand-me-downs at more than reasonable
rates became something of a tradition between us. When my first ever
PowerBook conked out, I bought one of his PowerBook Duos a year or two
before the millennium. Meanwhile, last year, my wife bought his
PowerBook G4, which was a steal.
Unfortunately, acquiring previously-owned gadgets will always have
its hits and misses.
Late last year, I bought two used, first generation Bondi Blue iMacs
from two different individuals at prices so low even our office IT
administrator couldn’t believe it.
Soon enough, I had to eat humble pie.
I found out that the first was fitted with a hard disk that didn’t
work and that the second (which came with a DVD drive but whose left
speaker was busted) had a motherboard problem, an issue which these
kinds of iMacs are known for.
Unwilling to have both units fixed, I easily came up with the
second-best solution: I took it to a Quezon City-based Macintosh shop
where both units were cannibalized to produce a previously-owned yet
dependable iMac I could be proud of.
Since then, the iMac, which runs OSX, has been my workhorse, allowing
me to beat deadlines, such as this one, without any hassle at all.
Nevertheless, the whole undertaking has taught me a lesson, however
trite. Life is like a cheap gadget: sometimes, you get what you pay
This will appear in the March 2 issue of Personal Fortune, the monthly magazine of BusinessMirror, a Philippine broadsheet