Amando Tetangco and the Bangko Sentral Innovate on Inflation 235.0
Governor Amando M. Tetangco Jr. and the Bangko Sentral have adapted a great innovation for the Philippines – inflation targeting. I say adapted because inflation targeting is typically applied in industrial nations and not an emerging market like the Philippines. The adaptation is in setting a medium-term target and range to 4% +or- 1% to [...]
Fiscal Challenges to Pres Aquino for a Stable Innovator Peso 230.0
From news reports, the new Aquino Cabinet spent the whole day, yesterday, checking on the veracity of the Arroyo economic statistics suspecting that the numbers to have been embellished to show better than real Arroyo performance. This seemingly unseemly activity from the new administration to the last is necessary to have a solid basis for [...]
Tempests Threaten the Philippines and the Peso in Power Game 217.0
In Q1, the Arroyo administration spent P400 billion from borrowed funds mainly for infrastructure to buy Administration support for the elections. This has resulted into a blip of a growth surge to 7.3% for the quarter but leaves an egg for a huge budget deficit for the incoming Aquino administration for the rest of 2010. [...]
SYNTHESiST Surveys on Philippine Financial Problems 168.0
A screening poll for SYNTHESiST readers to know ourselves more I have created a screening survey below (on 2/2 posted on Sidebar, too.) to know how the group’s choices affect innovation, in the long term. Please choose one answer as honestly as you can. Your choice represents an important part of the collective voice of [...]
Independent Central Bank: The Modern Gold Standard 132.0
The Central Bank of the Philippines struggles for independence An independent central bank is the direct descendant of the gold standard. In fact, it is a very innovative replacement that is fit for our time. The key word here is “independent.” Independence allows central banks to exercise standard monetary policy focused on the value of [...]
Deficit Devalues Peso, Cuts Investment and Innovation 125.0
One of the main barriers to long-term foreign direct investment (FDI) in the Philippines is currency risk. With low FDI, the Philippines is deprived of a major source of intensive learning and innovation. Currency risk arises from the change in price of one currency against another. Every Filipino and his uncle seem to agree that [...]
Support our Innovative Entrepreneurs 123.0
Filipino companies and entrepreneurs hardly do any basic science-based research. All the while, I have thought this to be only because of the high cost and uncertainty of doing such research. I have come to realize that they know it is less risky (and more rewarding) to take opportunities from inefficiencies in the local economy [...]
Managing for Medium-Term Peso Appreciation 120.0
The usual first response of Filipino exporters and contact and BPO center businesses to a strong peso appreciation is to ask the government, through their industry associations, for a foreign exchange bailout. With the government considered a soft touch and not proactive, this has created a culture of dependency over the years. It made companies [...]
Filipino Taxpayers, Be Ready for a Possible Reserves Grab at the BSP 119.0
Since we cautioned about the depreciating US$ just three weeks ago in our September 18 post, the Philippine peso has strengthened by 3.0% to PhP46.656 (closing rate, 10.8.09). As in October, 2007, this is a danger signal as some sectors like exporters, BPOs and OFWs will start to clamor for support from the rapid rise [...]
New Dangers Lurk as the US Dollar Depreciates 111.0
Three days ago, I heard a guest at Bloomberg call out that the US has become “a source of funds for the carry trade.” Since then, the drop in the value of the US$ and the improbable rise of the peso to PhP 47.70 to US$1 (closing today, 9/18/09) tend to support that claim. If [...]
