We need a strong Philippine currency!

Today’s leaders have critics and supporters, detractors and loyalists. The rich still get richer and the poor not just poorer but have grown in numbers. Thanks to a sustained growth in population and growing dollar remittances from OFWs, the government is able to use percentages to be able to show percentile improvements in economic indicators. This is in spite of the fact that the number of people living below the poverty line is actually increasing.

Tax Reform for Acceleration and Inclusion (TRAIN) is seeking to address poverty through more taxes. The logic in this is clear in the minds of the country’s economists who were schooled in the world’s top business universities. They have referenced models that have worked for other countries. While I believe we need to give TRAIN time to produce it’s anticipated good results, there are unfortunately other forces that are pushing prices up. Inflation rate is rising and nothing is happening that could be counted on to reverse this trend.

Granting a substantial wage increase will give wage earners the perception that this increase in spending money will allow them to buy more goods. Ironically this same increase in money supply (along with an increase in private lending or credit ━ as in credit cards and installment purchases) will just push inflation rates upward. The subsequent rise in prices will negate the increase in spending money coming from a substantial wage increase. Much like getting people to run faster so they can stay in the same place.

What is needed is not MORE pesos but a STRONGER peso that will allow the same peso to buy more. Building a stronger economy can do this. Increasing the value added by labor to the production of goods and services (a fair day’s work for a fair day’s pay) can do this. Fair pricing of goods and services can do this.

What else might we do? Time to think out of the box. Get away from those old drawing boards brought back from business schools abroad that still use the same text books from periods in the past where circumstances were different from today’s and from the Philippines’. Let us start thinking for ourselves within the context of what we have. I could be wrong. But should we persist in pushing the same formulae that have not worked in the context of the Philippines circumstances ━ which include the Filipinos’ sense of values, priorities, political morality, capacity to submit to needed disciplines such as thrift, and the country’s resources ━ human, natural and capital?

But for now, we all need to push in one direction, even as we continue to voice our individual positions. Some leaders hear best when people speak softly to them. Some leaders shut out loud noises because they cannot think clearly in a chaotic environment. Some people work best with people who are willing to give their programs a chance and will listen to other ideas when their own have failed. Psychology 101?
Charlie, San Francisco, CA

Updated: 2018-06-29 — 03:36:19