THE impact of the much ballyhooed flight of the dollar actually depends on which side of the political spectrum commentators are coming from.
For lack of knowledge in finance and investment, I can only tackle this subject from a barber’s point of view. My view. So as a starter, I beg the academe and the educated to “huwag na kayong kumontra”.
There are three sides on this subject. If we read the recent issues of major dailies and even the social media, one thing is obviously apparent.
One newspaper blames the flight of the mighty dollar on the uncouth language of President Rodrigo Duterte. The other simply says the exodus is nothing but a kneejerk reaction to some regional development that scares hot money “investors”.
Hoi polloi like this writer, and there are legions like me, are intimidated by the complexity of the subject and because we do not know whether our understanding is right or wrong, we just go by the simple process of perception.
We, of course, heard President Duterte’s preference for “foreign direct investment”. His finance czar, Secretary Sonny Dominguez, would explain this further to mean long term investments like those who set up factories and enterprises. Unlike hot money or portfolio investors, the former are prepared to weather challenges which are a universal reality in any country. Hot money is easy to liquidate, meaning it can leave as quickly as when it entered.
Since I eke out a living in Davao, let me tackle this from my perspective. The port of Davao is export-oriented. The only commodities imported here would include plastic pellets, carton plies, agriculture inputs like fertilizer and chemicals. These are all used in the cultivation of and packaging of Cavendish bananas, fresh pineapple which we export worldwide.
On the other hand, Davao City is the Philippines' major hub of business process outsourcing. Meaning it is a service provider and not a dollar cent goes out of the region.
Furthermore, just like other areas in the country, Davao has its share of Overseas Filipino Workers (OFWs).
When the political opposition and their minions speak about repatriation of dollars from the Philippines to the home country of portfolio investors, Davao businessmen would merely raise their eyebrows. A small banana planter gets his exports remittances in dollars, goes to the bank and money changers to convert these to pesos and goes home richer than he was before.
It is now “ber” months and it is the season when OFWs send dollars to their families and with the value of the dollar vis-a-vis the peso appreciating these days it means bonanza for them! Prices of basic commodities are the same so why worry?
Some portfolio investment managers believe so much the scare tactics which the political opposition have been spreading thru their propaganda outfits here and abroad. They talk about instability which they claim is brought about by Duterte’s expletives! What instability are they talking about when the President is enjoying an unprecedented 91 percent trust rating in the history of the country? In fact TV 5 is now telling us that that has increased to 97 percent.
Instability is the last word to describe the condition in the Philippines today. The government of Duterte is focused on eradicating major crime syndicates in the country and corruption in the bureaucracy is contained.
Duterte is feared and at the same time respected. He has exemplified a lifestyle of frugality and without uttering a piece of advice, those in the government follow. Rolled up barong sleeves, checkered polo shirt, denims, dried fish, and mongo for presidential dish.
Unlike his order to shoot drug pushers and drug lords who opt to fight it out with the law, his simple message to government workers is “stop corruption”.
While there are a number of complicated problems that have to be addressed like monstrous traffic in Metro Manila and Metro Cebu the Duterte government is on the way to make a significant and meaningful change in the government. The guns of the rebels have been silent and we are on our way to a stable peace.
Soon, when those hot money investors realize they were fooled by political oppositions, they will come back as quickly as when they left.
