RedBlueThoughts

Gloria lost her temper yesterday. She was announcing some good news before the media when a reporter asked her if it’s true. Gloria got slightly peeved. She asked the reporter if she has’nt seen the wave of infrastructure projects all around her. Gloria even asked the reporter if she has’nt read news stories on the entry of various foreign companies investing in the country.

I don’t disagree with Gloria. Neither do I blame the reporter for asking that kind of question. They are actually speaking from different directions.

For Gloria, she knows that the economy is really on the rise for several reasons: First, the influx of MNC’s setting shop in the Philippines. Recently, a global call center company setup shop in Batangas. There are others which recently established their subsidiaries in Makati, Ortigas and Cebu.

Second, government is awash with cash. Gloria has signed several agreements for infrastructure development, one of them the highly controversial and anomalous ZTE contract. This is due to the collection of taxes, brought by E-VAT.

Lastly, both the stock and money markets have not been entirely affected by the brewing financial crisis in the States. The stock market remains stable and the FX market continues to have balance.

These things are indicative of an improving economy. However, what economists question about Gloria’s pronouncements are the following: First, the economy is slowly being totally dependent on foreign portfolio capital. As any Tom, Dick & Harry knows, portfolio capital is unstable. Sustainability depends on many factors, one of them, political stability. Second, obviously government’s tax collection remains huge because of E-VAT and other taxes being imposed heavily on the population. And third, the Philippine economy remains stable despite the brewing US crisis, not because it has good economic fundamentals. Its because of the continued influx of OFW remittances which stabilize the fundamentals.

The reporter asked that kind of question because probably, her family is not enjoying the fruits of economic growth. With a measly monthly pay of 12,000, who would not balk at such a pronouncement?

Suggestions to GMA:

Gloria should undertake a charm offensive to inculcate into the minds of people that what she’s telling them is the truth. She should release her dogs bearing good news to everybody. She must also use her intelligence funds to fund advertisements and commercials harping on this fact.

Gloria should also stop the war in Mindanao. This is to preserve the gains of her administration. War would dissipate whatever economic development we have reaped so far. War is costly, and being an economist, Gloria should be sensitive about costs.

Lastly, Gloria should fire her publicists and information specialists. They are doing her a disservice because such pronouncements need some sort of “pre-buzz” campaign before the actual pronouncement. They did’nt do their homework. That’s why she’s now suffering the blunt of negative comments about her pronouncements.

Gloria have a very short period of time to do these things. If she fails to do this, she risks the wrath of the people and possible ouster from power prior to 2010.

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