RP: Moody's 'walking debt'?

DIE HARD III

Herman Tiu Laurel

11/5/2012

Many Third World countries were ensnared in the global debt trap in the 70's, after the US decoupled its dollar from gold, printed dollars its economy could not support and recouped by trapping nations into endless borrowing of its fiat currency. Other grew wiser: Argentina, Brazil and Russia re-negotiated and/or simply paid off their debts between 2005 and 2006. They have since become major global economic players after being freed from debt. Ecuador in 2007 repudiated unjust foreign debts forcing up to 80 percent write downs then paid off most of it, now economists are advising the Greece to learn from Ecuador. Debt free countries walk free, while debt laden countries like the PIGS (Portugal, Italy, Greece, Spain) are zombies of the international bankers — like the Philippines now being set up for a new round of debt indenture and continue poster boy for the "walking debt."

We have seen a flurry of flattering international and domestic financial news about how well the Philippines under Aquino III is doing (despite a third-rate two year average growth of 4.3 percent to this date from seven percent in 2010) capped off by last week's much ballyhooed Moody's rating agency upgrade of the Philippines "just a notch below investment grade." This is the bait. The upgrade prompted Budget Secretary Butch Abad to quip, "we in the Department of Budget and Management (DBM) are equally inspired to take the necessary measures to ensure faster and more efficient spending across the bureaucracy." Bangko Sentral ng Pilipinas (BSP) Gov. Amando Tetangco Jr. in a statement said, "We are delighted with Moody's recognition… This year, BSP has cut policy rates by a total of 100 basis points (one percent) to help the economy …to support economic growth." It all sounds well until we understand the present global financial background.

Actually, Standard and Poor, Fitch have all upgraded the Philippines, but all three ratings agencies have been in the line of fire since 2008 when they rated AAA Lehman Brothers and AIG just before the two collapsed. All have since been accused of conflicts of interest in the ratings game as they are paid by the global bankers for this service. While BSP's Tetangco proudly touts his 100 basis points rates cut in the Philippines it must be remembered that interest rates for the banks in the US under the QE3 (Quantitative Easing III, unlimited printing of dollars for the banks) is practically zero, and "hot money" find its way into the Philippine financial system, stock and money markets, to siphon real value for its dollars without cost.

The PPP (public-private partnership) is repeatedly linked to the credit-upgrade, as international banking (read, mafia) are all waiting to broker the cheap money for the PPP. For example, "HSBC Holdings Plc. says it has six clients ready to bid for some of the $16 billion of projects to build hospitals, roads and airports … while Japanese company Sumitomo Corp. (shown to overprice its costs) may offer to upgrade and maintain two railways in Manila." The PPP has suffered delays, Aquino III explain that it is "taking some time because we want to ensure that these projects provide a reasonable return to investors." What they apparently are waiting for, government and PPP companies, are the near zero-interest rate funds to be channeled, with margins made, through the international banks.

The Moody's ratings upgrade of the Philippines and the mainstream media's uncritical and unquestioning paeans to, is setting up the Filipino people for more debt that it needs like a hole in the head. Easily forgotten in the noisy celebrations of the "credit upgrade" is the fact that the Philippines does not need to borrow anymore from the transnational loan sharks or "banksters" (gangster-bankers, as financial analyst Max Keiser calls them) like Goldman Sachs, J.P. Morgan, Citi, HSBC, et al. The government and the Filipino financial system buttressed by OFW earnings, with $83-billion gross international reserves against $63-billion foreign debt and P 1.7-trillion in the Special Deposit Account with the BSP can pay off the entire foreign debt with more to spare. Didn't we lend to Greece at three percent or one percent interest loss over our own debts?

Moody's upgrade encourages more the debt, a component of the US' global financial warfare for its own recovery targeting the gullible. Antonio, Shakespeare's Christian who lends without interest, tells money-lender Shylock "If thou wilt lend this money, lend it not as to thy friends — for when did friendship take a breed for barren metal of his friend? — But lend it rather to thine enemy, Who if he break thou mayst with better face exact the penalty. (1.3.8)" The compounded interest and principal Filipinos paid international bankers (Paris Club) is three times over the debt incurred since President Diosdado Macapagal accepted IMF's $ 300-million "stabilization fund" in 1962 after "decontrol." 2013 is time to reject new debt and pay off all old debts: Retake control of our nation's finances and walk, free, proud and prosperous.

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