The following is a write-up from the president of the Bank of the Philippine Islands about the current global financial crisis and how it will affect the Philippines.
Fellow Unibankers,
Attached please find a piece that I was supposed to write for an outside publication - unfortunately, I cannot submit it as the ending is perpetually changing.
What I thought to be a gathering storm to hit in the first quarter of 2009 has hit our beaches yesterday - the Philippine Stock Exchange had its highest (12. 27 %) drop in history a single day, and the Peso Dollar exchange rate is creeping back from around P 41: $ 1 to almost P 50 : $1. Like other markets in the region, the PSEI has dropped 50% ytd, and people are getting nervous.
It has now become a Fundamentals versus Emotion issue - Philippine economic fundamentals relative to the world and even Asia are good, and the banking system is stable, but Bloomberg 24×7 Television, local media reports, and cocktail party talk make people fear the worst, and then expect the worst.
A re-send…if only to remind us.
THE ONLY HOPE FOR THE PHILIPPINES
by Father James Reuter, S.J.
By her own admission, GMA (Gloria Macapagal Arroyo) rightfully assessed that over the last decades; our republic has become one of the weakest, steadily left behind by its more progressive neighbors.’ Forty years ago, we were only second to Japan in economic stature, and way ahead of Singapore , Hong Kong , Malaysia , and Thailand . Today, at our present growth rate, it will take us 30 years to get to where Thailand is.
1. A population of 160 Million;
2. Of those, 70 to 90 million (equivalent to our current population) will live below the poverty line;
3. Our national debt is estimated to be at US$200B (compared to US$28B when Marcos fled, and US$53B today);
4. We will be competing, not against Thailand or even Vietnam , but against Bangladesh ;
5. We will be the most corrupt nation in Asia , if not in the world (we’re already ranked 11th most corrupt nation by Transparency International) ..
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