Friday, November 23, 2007

the philippine peso paradox

It needs the distinct expertise of a Doctor in Economy—preferably a graduate of a prestigious foreign university—to really know and explain well the paradox of the Philippine Peso. And there must be certain well known economists in the country who probably understand what it is all about. But many Filipinos are at a loss. The simple men in the streets and the plain women at home continue to wonder why. They are confronted with the big enigma of the once simple peso that bought what they wanted and paid for what they needed—and now it is no longer that simple.

They hear the distinguished Malacanang occupant together with its much favored faithful followers sing in great harmony the high praises of a more and more costly Philippine peso that however buys less and less. The government and its well rewarded minions jump for joy that it takes much more American dollars to convert them to Philippine pesos which nevertheless buy much less. In other words, the once common peso has become a mysterious reality. Before, the peso was cheap but it bought more. Now, it is costly but it takes more pesos to purchase less goods. The peso is said to be strong, and yet it has a weak purchasing power. Why, oh why?

Is it because of the law of supply and demand? There should be then too many pesos in the pockets of Filipinos who however have very little need of them. The government must have printed too much money that people have no use for. Or although they have much of it, the millions of citizens have no purpose for them, or need so little of it to finance their day to day living, or have so very few demands that they have no reason to have much peso on hand.

Is it the Japanese times once again in the Philippines? Those were the days when it took more than a sack of the so called "Mickey mouse" money to buy but a ganta of rice. It was then that a big bag full of money bought but one little chicken egg. And it’s practically the same these days. So much more Philippine pesos are needed to buy less food, to purchase so few commodities, to pay for but a little gas.

Is it because of the over-development of the Country? People must have become so rich. They have so much money in the banks, in the safes, in their hands that it is all right for them to throw it around for anything, even for nothing. Never mind if they have no food to eat, no clothes to wear, no roofs over their shoulders. They are after all wallowing in cash. They need nothing else.

Or is it more simple than any of the above ridiculous assumptions—and similar funny economic conclusions? What about any of the following elementary explanations: There is an ever rising local inflation rate. There is a continuously decreasing productivity in the country. There is worsening underdevelopment in the land. The Philippines has a downright import-consumer economy

In other words, as one Churchman said it well recently, the big and pervasive economic woes of the Philippines squarely rest on the fact that the present government is not only financially but also morally bankrupt. So sad but so true!

+OVCRUZ, DD
23 November 2007