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Thursday, January 29, 2004
Famador: Currency for the moody
By Joel Famador
Many people think Fernando Poe, Jr. is the real cause of the plunging peso. They say he is scaring away businessmen and investors because he is going to win the presidential derby. And he doesn’t have the slightest idea how to run this topsy-turvy economy. Wrong.
It is the budget deficit of almost P200 billion that’s making our currency shaky and moody. Because of her inability to control overspending in this banana republic, President Arroyo has caused our budget deficit to soar to high heavens.
Because of our soaring deficit, Moody (it rates sovereign debt all over the world), just lowered our rating by a notch (lucky for us). Which means our credit risk to international lenders has gone for the worse. We have to pay bigger interest rate for our future borrowings.
No wonder our government canceled its planned sale of dollar-denominated bonds worth $750 million. It could have been a major embarrassment for us, as nobody would have bothered to touch any of our bonds for being too risky.
Right now, our credit rating abroad is on the same level as that of Fiji Islands in the Pacific Ocean, Bulgaria (the former communist state), and Guatemala in Central America, the original banana republic (and you thought banana republics can‘t survive, huh?).
Because of our propensity to overspend (like buying those useless expensive cell phones?), our banana republic borrowed no end to the extent that we have to allocate virtually one-half of our almost P1 trillion budget for the payment/servicing of our national debt.
(We are getting to the level of California, which is suffering a deficit of $38 billion, but remember that this state is the sixth biggest economy in the world, and ours is, never mind. Maybe that’s the reason why they got the “Terminator” to run their economy – the guy knew how to run his own business, which is in the hundreds of millions of US dollars. This is no endorsement for FPJ, baby.)
Okay, since we are talking about “presidentiables,” how about picking Raul Roco, who, according to Makati businessmen, is witty and intelligent. The problem is that they stop right there in the praises. They don’t put their money on the man.
Why, oh, why, Joe Banana? Are the big businessmen thinking only of betting on the horse that appears to be the winner? Like in Erap’s time? Probably, for how could they collect the IOU’s if their candidate lost?
So Mr. Roco might as well be content of his role as a curtain raiser. He will start the show with a big bang (not bank, dummy), but will end up nowhere in the end. Just like Lito O in 1998. A flash in the pan.
So that’s as moody as they can be. Just like our currency.
(January 29, 2004 issue)
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