Philippines: Asia’s surprise turnaround story?

WE HATE to say it, but since many Filipinos seem to believe foreign prophets more than their own, we share below a Bloomberg report titled “The Philippines could be Asia’s surprise turnaround story this year.”

In a Jan. 15 online article on the Philippine economy, Bloom-berg noted: Inflation is easing; stocks and the currency are recovering; and Moody’s sees reserves among strongest in emerging markets. The article authored by Claire Jiao:

The Philippine economy is staging a comeback this year.

After last year’s inflation shock, a five-percent slump in the currency and a widening current-account deficit, pressure is starting to ease. Consumer-price growth slowed last month, the peso and stocks are rebounding, and the current account is set to remain manageable.

Economic growth is expected to exceed six percent and reserve buffers are among the strongest in global emerging markets, according to Moody’s Investors Service.

“We’ve seen the worst in 2018,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila. “We are cautiously optimistic because we know we’re not there anymore.”

The benchmark Philippine stock index has risen more than seven percent this year, the biggest gainer in Asia. The peso is up 0.8 percent to 52.2 per dollar, after being one of hardest hit by an emerging-market rout in 2018.

Goldman Sachs Group Inc. forecasts the peso will strengthen to 50 per dollar over the next 12 months, according to a note on Monday. The tightening in financial conditions last year should slow domestic demand and import growth, helping support the current account, it said.

“There’s more room for the peso to rebound, with sufficient reserve buffers and quite solid fundamentals,” said Koji Fukaya, chief executive officer at FPG Securities Co. in Tokyo.

The Philippines has the advantage of having low foreign debt obligations. External debt payments due this year and total non-resident deposits over one year are estimated at 25 percent of foreign reserves for 2019, the lowest among 19 emerging markets tracked by Bloomberg, according to Moody’s forecasts.

Remittances from Filipinos living abroad are a key pillar of support for the economy and the currency, amounting to 10 percent of gross domestic product. Those inflows rose 2.8 percent in November from a year ago, according to data released Tuesday.

As economic fundamentals firm up, they should offset risks including a prolonged US-China trade war and an uptick in world oil prices, which hampered the economy last year.

“The waters are no longer murky. Investors are ready to dive back into the Philippines,” Ravelas said.

(Our layman’s comment: The positive forecast may yet materialize. This being an election year, we expect some kind of false prosperity, with political dynasties and partisan parties spending billions to buy control of the two houses of the Congress. What to do? We’re reminded of the late Jaime Cardinal Sin’s advice to voters, given in his usual half-joking manner, to take the money – it was stolen from them anyway – and then vote according to their conscience. Amen.)

• Belated lessons from DFA passports mess

THE DEPARTMENT of Foreign Affairs has settled the question over birth certificates being required for passport renewal (answer: not needed), but still has to prosecute the party that allegedly had run off with the personal data of applicants (tentative answer: nobody did).

The passports mess blew up last week after some applicants renewing their passports complained they were being given a hard time, citing a requirement for them to present their birth certificates.

In one of his piecemeal responses on social media, Foreign Secretary Teodoro Locsin Jr. (@teddyboylocsin) twitted on Jan. 12:

“The problem started under GMA’s DFA and got worse under PNoy’s DFA. IT WILL BE SOLVED BY PRRD’s DFA under locsin. The yellow crowd who perpetrated the passport fraud are in a panic because we are gonna autopsy their crooked deal. Period.”

The torrent of reactions, including that of former Foreign Secretary Perfecto Yasay (first DFA head under President Duterte), drew out substantial facts that were nearly covered by a thick layer of diverse opinion.

It seemed to us that Locsin fired off ugly insinuations too early, without first ascertaining the facts, against his predecessors in the Arroyo and the Aquino administrations. Unless he withdraws his remarks, or those offended do not insist on clearing themselves, Locsin may have to prove them after his threatened “autopsy.”

It is bad form for a Cabinet secretary to toss blame on his predecessors, without first checking the facts, for a problem that erupted while he was busy on Twitter.

Locsin expressed preference for a congressional inquiry to sort out the mess and assign accountability (and pass remedial legislation if they are up to it?). Knowing how legislative investigations have turned out to be political circuses, we are not sure that that is the best route to take.

On the issue of birth certificates, Locsin signed Department Order 03-2019 on Jan. 15 saying among other things that under the law (RA 8239), only first-time passport applicants and those in the DFA Watchlist are required to submit their birth certificates.

Under the department order, birth certificates are also required for applications for renewal of lost or mutilated passports, those requiring changes in passport entries, those for old green and brown passports bearing no complete middle name.

The order will take effect 15 days from the date of its filing with the office of the National Administrative Register (ONAR) of the UP Law Center. Nothing was announced about if/when it was filed with ONAR.

To help clear up the mess in the DFA and in the public mind, we suggest that the DFA Secretary publish an objective Timeline or chronology of events from the time it was the Bangko Sentral ng Pilipinas printing Philippine passports until today. He should have done that yesterday.

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ADVISORY: All Postscripts can be accessed at manilamail.com. Follow author on Twitter as @FDPascual. Email feedback to [email protected]