$67.8 BILLION FOREIGN EXCHANGE BY PH STILL RISING

$67.8 BILLION FOREIGN EXCHANGE BY PH STILL RISING

Erle Frayne D. Argonza

A truly good news, making PH as an endeared country for investments by both domestic and foreign stakeholders. $67.8 Billions—end of Apri 2011 Forex—is equivalent to nearly 14 months of imports, a fact that should make Filipinos happy a bit, more so that the forex reserves is coupled with a strong peso that is among the darling currencies of Asia.

The forex reserves is still rising by the way, and is following the general trend in East Asia. There is no better choice for PH to go then to continue to shore up its forex reserves, as the level of international trade, which surpassed the $100 Billion mark couples of years back, will breach the $200 Billion level of two-way trade (imports & exports) by 2015.

PH good performance in forex is for me a cause for celebration, amid the cacophonies of bad political news circulating on a daily basis. Economics had already sealed itself off from bad politics through a firewall, and so no matter what political fires there are, the economy will continue to grow and prosper. The ancient malaise of poverty hopefully would benefit from the sustained growth going on.

PH came from a very long history of lackluster performance as far as the forex level is concerned. Always short of the foreign monies, the International Monetary Fund found every reason to discourage foreign financiers, bankers, and investors from getting into the country. Low forex reserves also became part of the rationale for imposing austerity measures on PH, the effects of which are still felt today even if the country already graduated from the IMF program.

Low forex reserves also went hand in hand with Balance of Payments or BOP deficits. And may we add to the downgrading list the lingering low current accounts deficits. Add to the list the high level of public debts, which at one time threatened to bring back the economy to the stone age.

Those list of ailments have been addressed, thanks to the critique raised by patriotic economists on the present monetary and fiscal policies. The Bangko Sentral (central bank) also continued to strengthen its institutional capacities and regulatory grid, thus ensuring better inflows and reserves of foreign exchange.

By and large, exports comprise the biggest chunk of forex, at past $50 Billions per annum. Overseas remittances (workers & business profits), tourism, foreign investments (FDIs & portfolios), new money from external loans comprise, and ODA comprise the other gross sources. Minus the payments for imports, loans/credit, FDI repatriation of remittances to mother countries, and that gives you the net balance at any given time.

Converting the impressive forex reserves to loan-ready credit is a problem of the Bangko Sentral. The availability of low-interest credit for the poor folks, through micro-finance and cottage industries, is a challenge. Fat purses shouldn’t be made idle for long, as that would mean the high forex reserves is contributing to mass poverty which is a gloomy paradox if that will indeed happen.

[Philippines, 16 May 2011]

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PHILIPPINE STOCKS @4,200+ POINTS, WILL SURGE ANEW BY 2011

Erle Frayne D. Argonza

Asian bourses continue to perform excellently, and the Philippines is a contributor to this bullish trend. In the past year, there were some junctures when the bourses did dip a bit, but never too dip as not to be able to surge back ahead. The bourses reflect the optimal growth patterns in Asia and are bound to replicate the feat in 2011.

By the start of 2010, I was of the opinion that the Philippine stock exchange will trade very bullishly, that it will eventually breach the all-time best record of 3,600+ points achieved during the era of the Ramos presidency yet. True enough, it did breach the 3,600 points and ended up at 4,200+ points by end of December 2010.

To recap, 2,000 points is the bourse’s psychological break point in my beloved Philippines. Quite a barometer of the economy’s health, the stock index says that the economy here is faltering when the bourse crashes below the 2,000 point barrier and stay down there for many months. At some time in 2009, that incident happened, though fortunately for the country the stock index climbed back past the 2,000-point threshold quickly.

Being among the Asian countries that have learned to insulate themselves from global economic downturns and great recessions, the Philippines did bounce back right away and saw the index breach the 3,000-point level in the first semester of 2010. This trend alone is cause enough for great hope for the coming months and years in this country.

With ‘smart money’ leaving the North due to stagnation and recession, it wasn’t long before the Ph bourse soon felt such ‘manna from heaven’ getting invested into its stock options. With that happening, the stocks  meteorically ascended the 4,000-point level in the 2^nd semester, and was optimistically forecast to reach 4,600+ points by certain quarters.

Witnessing the pattern of periodic decreases amid a general trend of sharp climb, I did raise eyebrows over the mega-optimistic forecast. I was already happy to see the 3,600+ points breached, but a 4,600 point conclusion is far from achievable in 2010. And so, true to my intuitive forecast, it settled at 4,200+ points, or just 200+ points beyond the new barrier of 4,000 points.

As big ticket projects are now on the pipeline for negotiations and implementation soon, we can expect investments to surge upwards more sharply this 2011. This will be reinforced further by the upgrading by Moody’s of the country’s investment grade from “stable” to “positive” just as soon as the new year commenced.

An offshoot of the optimism in the investment field will be entry of more players locally to purchasing stocks in the new IPO options opened to the public. Furthermore, ‘smart money’ from overseas will inflow into the local bourse and capital markets, thus ensuring another year of surge in the stock index.

This time around, I will be among those who will accept a forecast of the Philippine bourse breaching the 4,600+ points at the end of 2011. Granted that fairness in the stock trading and surety of regulatory mechanisms will be stronger this year, the Philippine bourse will perform excellently again this year and facilely breach that new forecast level.

[Philippines, 13 January 2011]

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VATICAN WEALTH COULD MAKE OR BREAK AMERICA OR ANY WORLD POWER

Erle Frayne  Argonza

 

In a previous article I tackled the real reason behind the unprecedented respect accorded on the Pope by the officialdom of the USA. As I cogitated in the article, the reason has got to do with the enormous wealth of the Church.

 

In some previous articles, I tackled about the financial power of the Catholic Church in the Philippines, a power that bestows on the Church the status of being the wealthiest landlord-capitalist oligarch in the country. I have also been discoursing, for over a decade now, that Philippine poverty can be fast-tracked if and only if the Catholic Church would be taxed of its properties and businesses, and its estates undergo land reform. 

 

If we take the Catholic Church as an entirety in the planet, with its diverse archdioceses and dioceses, religious orders, banks and related financial institutions, lay clubs with their vast assets, and all the social development groups involved (combining all member of the Church), we have before us a gigantic web of organizations and colossal assets. At the center of it all is the Vatican, with the 2^nd College of Bishops as the top organ of corporate governance.

 

Without doubt, no other corporation on Earth could match the Church organizationally and wealth-wise. And no corporate group, both private and state, would ever clash with the Church concerning policy or the highlighting of church wrongdoings, as this would badly backlash on the bellicose party. Likewise wouldn’t any nation among the ‘open society’ states openly clash with the Church without experiencing the fatal backlash.

 

If we were to estimate the wealth of the Church, we will surely be overwhelmed by the immensity of quantity at hand. The annual income alone from all church and church-related operations, counting both the huge donations and the business operations, would already amount to trillions of dollars. By my own rough estimate, the Church ‘gross domestic product’ would well surpass the USA’s or EU’s.

 

How about the value of the land estates and the buildings (church, schools, businesses, retreat houses, seminar houses, humanitarian & social development, health-related, etc)? current assets from both donations and financing institutions (banks, financial houses)? gold bullions accumulated after centuries of operations, including those taken through plunder of conquered lands? These must run in the hundreds of trillions of dollars!

 

Fellows, the Vatican is indubitably the wealthiest, most powerful global corporation or holding company. With such power, it could make or break any nation for that matter, as it had done secretly on the atheistic Soviet Union.

 

Destroy a nation’s currency, and you would destroy it totally. This is an axiom known to Keynes and economists that includes myself. Knowing this well, the financial operators of the Church did exactly apply this shock operations on the Soviet Union that saw its total irreparable collapse.

 

Led by combined mafia-Opus Dei operations, the Church purchased the greater bulk of USSR currency at quite promising sums. Having then run out of bills for daily transactions, the USSR through KGB operators had to buy back the rubles via black market, but this time bought at very costly prices (in US dollars). Until finally realizing that it doesn’t have sufficient foreign reserves and gold to leverage the ruble drain, the USSR collapsed under the deadweight of its own roof. Simple!

 

And that, fellows, is the subtle message of the Vatican to both the American and British oligarchs whose predatory financial transactions and wars are now proving to be catastrophic, that they threaten the heart of Vatican operations itself. And time is now running out on the same oligarchs and their respective states.

 

[Writ 28 May 2008, Quezon City, MetroManila]