Sanchez: The dreaded SM

I HEARD that word before, SM. Not the megamall, but the Sick Man of Asia.

“The ‘sick man of Asia’ may need a return visit to the economic emergency room,” says the, um, the so-called yellowtards.

Wrong. Guess again.

The writer was William Pesek, an award-winning Tokyo-based journalist who won the 2018 prize for excellence in opinion writing by the Society of Publishers in Asia, for his work for the Nikkei Asian Review.

For more than 140 years, Nikkei Asian Review has been providing unparalleled coverage of Japan’s economy, industries, and markets. The group’s business portfolio includes publishing, broadcasting and the Nikkei 225 stock index. Its flagship newspaper, The Nikkei, has a circulation of approximately 3 million.

Pesek said in the Nikkei, Rodrigo Duterte has skipped more than a few ward rounds in these last 860-plus days. Rather than tap new methods to increase competitiveness, curb graft and strengthen institutions, Duterte engaged in a ghastly war on drugs and authoritarian bombast.

The price for his bombast? The slowest growth in three years; the worst consumption trends in four; and the highest inflation in almost a decade. The peso has plunged 6.4 percent since January and the central bank is rushing to implement the most aggressive monetary regimen since 2000.

May pro-Duterte economists heed Pesek’s words. I had talks with one who declares the gloomers of economic busts are purveyors of bad news.

Well, no one can accuse Mr. Pesek of printing bad news or Nikkei for that matter.

Pesek also said in the Japan-based publication, the parallel should worry investors and corporate executives alike. The last time Bangko Sentral ng Pilipinas (BSP) hit the brakes this hard -- 150 basis points so far in 2018 -- Joseph Estrada was literally being chased out of the presidential palace. Filipinos will tolerate a lot from their leaders, but not runaway inflation. Then, as now, skyrocketing costs are threatening the Duterte’s political standing.

Inflation is racing ahead of growth. The 6.7 percent rate reported in October puts consumer price gains far above the central bank’s 2 to 4 percent target.

Not a good look for a developing nation that only won investment-grade status in 2013. Even after recent increases, the 4.5 percent benchmark lending rate looks too low. There is chatter BSP should tighten again -- as soon as November 15.

Whew, what a way to celebrate Christmas to end 2018. I hate to think what’s in store for Filipinos in 2019. Perhaps Christmas can be celebrated simply the way we know of the Holy Babe in the manger was born.

We might be on our way not to SM with a basket of Christmas goodies, but become a basket case as the Sick Man of Asia.

(bqsanc@yahoomail.com)