POSTSCRIPT / May 29, 2007 / Tuesday


Philippine STAR Columnist

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Manila shakes off IMF stranglehold

GOOD NEWS: After nearly half a century, the Philippines finally unshackled itself this year from the International Monetary Fund by fully repaying the debt it has accumulated over the decades with the multilateral financial institution.

That is not today’s only good news.

* Our dollar RESERVES have swelled to a level unseen before as a result of more foreign investment inflows, reflecting a renewed confidence in the Philippine economy, and increased remittances by overseas Filipino workers whose deployment has declined.

* The PESO has regained strength against the US dollar. Whereas it was P56 to the greenback some time back, it now hovers in the P45-P46 range.

* The INFLATION rate has remained tame — it was 2.3 percent in April — in spite of rising world and local oil prices. Compare this to the inflation rate of more than 30 percent in the ‘80s.

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BAD NEWS: Now cry over this sad news. A barangay captain in Betis, Pampanga, was executed yesterday morning by motorcycle-riding gunmen in front of his home in barangay San Juan Bautista.

The victim, Mario “Jomar” Nulud, was a campaign worker of governor-elect Ed Panlilio, the priest who, running without a party and campaign funds, scored an upset in the elections of May 14.

May the merciful Lord forgive the vengeful parties who had paid for the senseless murder of Among Ed’s worker.

And may President Gloria Arroyo, wherever she is, take time naman to look after her cabalen despite the defeat of her local candidates in Pampanga.

* * *

BOOM TALK: As I was about to say before the bad news hit me like a million-peso TRO… the improvement of our finances and status in the world financial circle would be credited, with good reason, to President Arroyo and her economic team.

A vital member of GMA’s team is Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr., who also heads the independent Monetary Board.

It was in an interview conducted by the Capampangan in Media Inc. (CAMI) with Tetangco that the positive items mentioned above came together to reveal a bright picture of an economic turnaround.

* * *

FREE AT LAST!: As BSP chief, Tetangco has had to employ monetary tools directly impacting on the country’s economic well-being.

With its dollar reserves swelling, the Bangko Sentral pre-paid the standby assistance it obtained in the 90s from the IMF, thereby technically freeing the Philippines from the dictates of the meddlesome Fund.

Suddenly the Philippines is now free of IMF conditionalities!

This does not mean, Tetangco said, that the Philippines will stop observing prudent financial management or “good housekeeping” rules that the IMF always imposes on nations tapping its funds.

* * *

PROBLEM OF PLENTY: The sustained growth of our international reserves, which hit $25.1 billion last April, buttressed the country’s foreign exchange holdings, ending the cycle of deficits that has bedeviled it since the 80s.

Tetangco quipped in the CAMI interview that the country now faces a “problem of plenty.” Even local business enterprises, he noted, have managed to pre-pay their foreign obligations.

The robust dollar reserves allowed the peso to recover ground lost in previous years vis-a-vis the US dollar. From a low of P56.0399 in 2004, the peso value has risen to its present P45-P46 range against the American greenback.

Nevertheless, Tetangco said that since the peso has been moving in tandem with regional currencies, Philippine exports remain generally competitive.

While this unavoidably hurt dollar earners — like OFWs and exporters of goods and services — this redounded to wider benefit in terms of (1) stable prices of goods and services in the face of world crude prices hitting anew the $70/barrel level, (2) cheaper imports of raw materials and finished goods, as well as (3) improved debt servicing.

* * *

NET INFLOW: The country chalked up a net inflow of $1.081 billion in newly registered foreign portfolio investments in January to April, with gross inflows reaching $4.446 billion compared to $3.365-billion worth of capital repatriations/outflows.

This net inflow was 83 percent more than the $592 million net inflow registered in the same period in 2006.

Gross investment inflows, which rose by 127 percent from the year-ago level of $1.960 billion, went primarily to Philippine Stock Exchange-listed shares of $3.551 billion (80 percent of total). Of this total, $3.172 billion were distributed among property, telecommunication, holding and utility firms, and banks.

Foreign investments in PSE-listed shares and government securities were 2.3 times and 1.9 times their corresponding levels in 2006.

* * *

DIABETES DRUG: Dr. Steven Nissen, a cardiologist at the Cleveland Clinic in the US, is in the news again with his study linking GlaxoSmithKline (GSK) diabetes drug Avandia (rosiglitazone) to higher risks of heart attacks and cardiac-related deaths.

He warned there is a 43-percent higher risk of having heart attack and 64-percent higher risk of death for those taking rosiglitazone.

Nissen analyzed summary information from pooled studies, including 42 clinical studies involving 15,500 patients treated with rosiglitazone. He admits, however, that the study was limited by a lack of access to original source data.

But many health experts and leading diabetes and cardiology societies worldwide said there was no cause for alarm, even as GSK strongly disagreed with the Nissen conclusions.

The Endocrine Society (USA) said “no precipitous action should be taken by the Food and Drug Administration or the medical community based on this meta-analysis, given the study’s substantial limitations as pointed out by the article’s authors.”

The American Diabetes Association also said that “the overall level of the risk associated with rosiglitazone appears (in the study) to be small.” The European Medicines Agency advised patients not to stop treatment with rosiglitazone and to discuss the medication with their doctors.

* * *

(First published in the Philippine STAR of May 29, 2007)

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