The trillion debt and the economic activity

Have you tried to wonder where that money you’re holding came from? You may say it came from your hard labor, but literally, it came from someone’s hand, from the market, from a cashier, from a jeep driver, from a buyer, or anywhere. Sometimes it’s also good to ask this question. Perhaps looking at money this way can help us understand the idea that everything in the local or global economy is just a cycle of financial activities that give traffic in the distribution of money from one hand to another or from this time to the future. Therefore, those who are not learned when it comes to a wise management of their money will soon end up losing it and those who are more knowledgeable in financial management may soon gain or prosper.

One thing which possibly we forgot to understand in the midst of the pandemic is the giving of financial aid to every poor Filipino family. This financial assistance is one government’s actions to ease the crisis brought by the pandemic and uplift the economy through Bayanihan recovery as one act. Regardless of the amount given, the printed money that citizens received is already a helpful factor to create a movement of our economic activity.

Now we are in the post pandemic era and a lot of people are complaining regarding the trillion debt of the Philippines. Again we have the right to question how the nation is going to pay for it in the long run. In a tax payers' mindset, this debt is surely a negative debt which will let the consumers and citizens suffer in the next years to come. In a businessman, financial experts, trader’s, or bank officials’ mindset, this trillion debt might be much better than printing more money during an economic crisis. For the writer, this trillion debt both has a negative and positive impact. The word debt is already a negative one which of course makes it easy for us to think of its negativity. What if we also try to see its positive impact not only as of this quarter, year, or administration but in the long term. Let’s go back to the question, which way is much better or less risky than all the risky ways possible, is it to have debt or to print more money?

The buying and selling is the core of the market. There will be a buying activity if people have money. However, other than the buying and selling there’s also what we call the demand and supply which now affect the value of money through inflation. A lot of Filipinos still have no basic idea about this economic principle. Some choose not to know, some forget, and some are not serious regarding these economic and financial concerns. For awareness, the level of financial education we have is also what designates us according to social class: poorest of the poor, lower class, middle or working class, and the upper class.

This time it’s good to learn how money and time work. The wiser and skillful you are, the more money you can have today or in the next few years. Money therefore is just a reflection of your level of financial literacy: asset versus liabilities, active and passive income. As the American writer and entrepreneur Robert Kiyosaki would say that before social class, rich or poor, there is what we call the Rich Dad or Poor Dad in our mind that drives us to believe the way we look at life and money. If you think rich, you’ll find a way to become rich. If you think you are poor, your mind stops there and you can no longer find any way.

Now how do you see this trillion debt? Do you see this as a negative thing or you see this as an opportunity as well in the long run?

John Caballes

Cebu City