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Good news indeed

Man at the Market
Jesse E.L. Bacon II

03/12/2010

The good news, if you can call it good news, is that monetary officials are optimistic our gross international reserves will reach new heights in the coming weeks on account of expected remittances by our heroes and heroines working abroad. And trade officials also announced a surge in our exports by as much as 42 percent in January alone.

These are economic indicators that as far as government officials are concerned are worth bragging about as they have actually bragged about them already. Realistically, however, are these indicators truly indicative of a bright economic prospect for the country in the short term or even long term basis?

The increase in foreign remittances by our countrymen working abroad about this time is not really new. This is a regular fare even in previous years because it is at this time of the year that classes in all levels — nursery, kindergarten, elementary, high school, college and even post-graduate studies — will officially end, thus the need of payment of tuition balances. Add to this the graduation from their studies of hundreds of thousands of the student population.

Foreign remittances are thus expected to reach higher levels at this point just as it does during enrollment period in May and the Christmas holidays in December. These remittances are actually predictable and not new to monetary officials. It is not worth bragging therefore, because even without any prodding by government officials, these contract workers abroad will still remit more during these periods.

Even the 42 percent surge in our exports on account of the volume of electronics products that we shipped out in January does not indicate that we are on the right track already toward economic recovery. Orders for these electronics products predictably increase in the first to the second month of every year as manufacturers or assemblers of electronics products utilizing those semi-conductor chips that are made here, which is the main export of the country, embark on massive production to meet their inventory for the year.

In simple language, the two indicators do not really tell that we are now on the road to economic recovery. In the first place, those semi-conductor firms located mostly in export processing zones are not really Filipino-owned manufacturing firms. They are foreign-owned and they just happen to be doing business here so their profits out of their operations here, more often than not, are all repatriated to their mother country.

We all know that repatriated profits have no impact whatsoever on the domestic economy. And these export processing zone locators enjoy so many perks with regard to their taxes. The taxes that our government can levy on them, if at all, are so miniscule that if our government relies on them, Nacionalista Party presidential bet Sen. Manuel Villar could not have been paid an overpriced Right of Way rate for those real estate properties of his traversed by the controversial C-5 road extension project that his Senate peers said he himself proposed and lobbied.

In truth and in fact, the direct benefit we can derive from the presence of these foreign-owned companies located in our export processing zones is that they provide jobs for our unemployed countrymen even if these workers are paid subsistence wages and do not enjoy security of tenure. These companies, let us not forget, are exempt from the coverage of our labor laws as part of the come-on our government offered them to locate their businesses here.

These are just some of the economic realities faced by the country that presidential aspirants should be talking about. It is in this area, however, that presidentiables simply mouth motherhood statements about their intention to minimize, if not eradicate poverty. Poverty is spawned by economic programs such as pictured above that in reality only tie the masses into perpetual suffering and misery. What we have is an economic program aimed at addressing the economic needs of foreign business interests even if this puts the masses at a grave disadvantage. For economic stability and prosperity, we need more than just the remittances from our compatriots abroad or exports by semi-conductor firms in export processing zones. (Reactions to jelbacon@yahoo.com)

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