RP’s currency and socio-political puzzle

DIE HARD III
Herman Tiu Laurel
10/22/2010



In June 2010, South Korea and Indonesia issued several currency policy measures. The former announced a series of controls to protect its economy from external shocks while the latter devised ways of capping short-term capital inflows and outflows. Earlier in October 2009, Brazil instituted a 2 percent tax on foreign portfolio investments. During this period, Taiwan also restricted overseas investors from buying time deposits.

The Philippines, in contrast, has being the doing the reverse under the International Monetary Fund (IMF)’s open mole, Cesar Purisima, by ushering in the flood of foreign moneys. In particular, Purisima exempted the dollar bond disguised as the “peso bond” from any taxes because, according to him, the bond “…has to be structured in such a way that there will be no tax issues.”

So with our gates wide open to predatory finance, the Shylocks that deluge the local market with dollars that couldn’t even earn 1 percent domestically are in today for a bonanza with Purisima’s 5 to over to 6 percent interest! Why, the IMF gofer even proclaims, “Our position is that we (the government) take the tax exposure.”

And yet, what he doesn’t say is that deluging the local market with dollars further appreciates the peso, causing our OFWs and exporters to get less pesos for the dollars they earn; thus, depressing their lives and incomes as well as those of others, such as the BPO sector.

And as Philippine exports are made more expensive in the international market, imports will become cheaper and more purchases from abroad will be made, which will depress our local industries even more, putting a great deal more pressure on social and national equitability. Already, we are hearing the cries of our OFWs and exporters.

Leaders everywhere are worried, too. Brazil’s Finance Minister Guido Mantega declares: “We are in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness.”

Today is an era of shrinking global demand. Issuers of reserve currencies, such as the US, adopt monetary expansion to cheapen their exports while non-issuers, such as Brazil, correctly respond with currency intervention. Those who do not do so, such as the Philippines, only find their currencies soaring to their detriment.

Brazil is touted today as one of the best stories of impressive economic growth. This is attributed, first of all, to the growth of its domestic production capacity, whereby products, such as cars and other vehicles, produced in Brazil are substituted for imports; and second, to the massive surge in Brazilian raw material sales to China — which mean a further breaking away from US and Western diktats on politics, finance, and the economy.

Purisima is leading this country into its final financial and economic ruin, and that is not surprising for one whose loyalty is to the foreign financial powers, and not the Filipino nation. He remains a governor of the World Bank (WB) Group and the Asian Development Bank and alternate governor for the IMF for the country, as one recent editorial of the Tribune revealed. So why would he bat an eyelash in sacrificing the welfare of this nation to prop up the US dollar, as we are seeing him do today?

It is the supreme irony that treason — both political and economic — not only goes unpunished but is richly rewarded; while patriotism and nationalism such as that of Senator Trillanes continues to be punished by the system (although we are happy that the Senate has finally concurred with the amnesty, over the dead political body of Joker Arroyo).

We have been educating our people to be concerned about the nation’s financial and monetary policies over politics and personalities. With regularity, we have brought our readers back to the time of Presidents Quirino and Garcia when capital and currency controls spurred a fledgling program of Philippine industrialization to gain a headstart over the rest of Asia.

These policies have to be restored to restore economic justice to our people. Only then can domestic agriculture and industry, not to mention employment and growth, be revived.

Aquino III’s government is a puppet regime of the US and the IMF, having several IMF-WB and US Embassy lackeys appointed to every key position in the Cabinet. It will not be more than two years before this predation and its disastrous impact will compel the people to react explosively to compel a reversal of policies.

The zarzuela between the “warring” Aquino III and Gloria Arroyo camps is exposed in the charades, such as in the meeting between the Budget chief with Arroyo supposedly to clarify the “cash transfer” program’s operations, the basis of which both are actually in agreement over. All told, these players are simply part of the continuing implementation of the US and Western plan of institutionalizing mendicancy in our people.

The Truth Commission of Davide is another such distraction. As we can see, it is clearly obfuscating the real issues against the Arroyo regime by stirring the pot with extraneous cases, such as Manuel Villar’s alleged budget-land manipulation schemes. The Davide commission is obviously intending to divert the cases away from the courts where they should be pursued, and with a certainty of success over time. But truth will out, as it now appears in the Glorietta bombing case.

Retired Army Col. Allan Sollano, Army Explosive and Ordnance Disposal unit leader at the Glorietta blast scene last Tuesday reaffirmed his original findings: “From… the dome in the roof of the basement and the damaged steel ladder… it was caused by a very, very powerful blast effect of a high explosive.”

He also recounted a meeting in Malacañang, attended by his men, where Gloria Arroyo supposedly told the generals to make the Glorietta blast a methane gas explosion. So it’s absolutely strange that the FBI team sent by the US concurred with the methane gas theory. Was there a quid pro quo there?

Gloria’s Noberto Gonzales was acting Defense chief at that time and destabilization was suspected. The massive defeat in May 2007 of Gloria’s senatorial slate was followed by the beheading of over a dozen Marines in Basilan in July. Two months later, the Glorietta blast occurred. It happened just days after Fidel Ramos issued veiled threats against Gloria that went kaput after the blast. And in November, a bomb exploded in Congress, killing Gonzales’ buddy and suspected brains behind the Basilan massacre, Rep. Wahab Akbar. Oh, how the pieces are coming together!

(Tune in to Sulo ng Pilipino, Monday, Wednesday, and Friday, 6 p.m. to 7 p.m. on 1098AM; watch “Privatization of Irrigation” on Politics Today, 8 p.m. to 9 p.m., with replay at 11 p.m., Tuesday, on Global News Network, Destiny Cable Channel 21; visit our blogs, http://newkatipunero.blogspot.com and http://hermantiulaurel.blogspot.com)