Tuesday, November 04, 2008 Filipinos get rebates, but didn’t ‘help’ US
LIKE the Americans, Filipinos who benefited from the United States Government’s stimulus package did not spend the tax rebates they received, supporting the observation by economist Joseph Stiglitz that the program was “badly designed.”
Roel Iway, a Filipino accountant who works in Manhattan, said the Filipinos who received tax rebates under the stimulus package sent the money to their families in the Philippines.
“So, they didn’t help the (US) economy at all. The purpose of the tax rebate was defeated,” said Iway.
As most, if not all, Filipinos who live and work in the US are paying for the education and basic expenses of their families left in the Philippines, they are most likely to send home the rebates they will get in the second stimulus package that the US Government is contemplating on releasing.
In January, the US Government decided to give out rebates, amounting to about $150 billion, as a stimulus to encourage US residents to spend and spur the economy. Consumption, which is a main driver of the US economy, is seen to boost business earnings and support enterprise and employment.
Under the first stimulus package, taxpayers get rebates of between $300 and $1,200 each. The amount of the rebate depends on the classification of the taxpayer (whether single, married and head of family, among others).
Second stimulus
A proposal for a second stimulus package is being prepared by House Democratic leaders. The Democrats reportedly plan to call for deliberations over the proposal in Congress after the US presidential election Tuesday.
Stiglitz, in recent papers and during the Women’s Economic Round Table forum in Manhattan on Oct. 22, described the stimulus package as “badly designed.” He noted that recipients of the rebates did not spend the money and instead kept them as protection if the economy worsens.
Unlike Americans, though, Filipinos working in the US did not keep the money.
“Most sent it home. So they end up with nothing,” Iway said, adding that Filipinos in the US are now in “very difficult” times. Some, he said, have to juggle several jobs and even allow lodgers (other Filipinos) to live in their small apartments just to make an extra buck.
He advised Filipinos who have invested in stocks or bonds to “ride out” the crisis. The good thing here (US) is that the stocks always make a rebound, unlike in the Philippines. So if you can wait for five or 10 years, you’ll get it all back,” he said.
He pointed out, though, that Filipinos in the US have to change their attitudes. They have to learn financial prudence, even with the things and money they send to their families in the Philippines.
Finances
“We also must learn to manage our finances. Now is not the time to squander. You never know what happens to the company you work for,” he said.
Stiglitz had also criticized the $750-billion bailout of the US Government for ailing financial companies. He described the bailout as a blood transfusion for a patient who is internally hemorrhaging.
He raised the need for the US Government to help those whose houses have been or will be foreclosed as a result of the sub-prime mortgage crisis, implement bankruptcy reforms for households and recapitalize the banking system.
The Nobel laureate presented his views on the present financial crisis in the US, which is threatening economies worldwide, to a group of journalists attending a seminar on covering development and poverty from Oct. 20-24 in New York. The seminar was sponsored by the International Institute for Journalism (of Capacity Building International, Germany) and the Initiative for Policy Dialogue. (LAP)
