Looking at the economic numbers coming out of the United States might make you less depressed about the Philippines. Or maybe not, since there is a large group of Filipinos that supported Biden.
Americans are so unhappy with their leadership that 63 percent think that the country is going in the “wrong direction.” Biden’s current job approval rating averaging all polls since April 2021 is 53 percent ‘Disapprove’, the lowest in history.
Inflation was 2 percent in January 2020 and is now 8.5 percent. The economy was growing at 1.9 percent back then and is currently shrinking by 1.4 percent. The US trade deficit hit a historic high in January and is at about the same level today.
The US Government Budget deficit is 16.7 percent of the GDP, the worst level since records started in 1948. Foreign debt is now equal to 137 percent of GDP. And you thought the Philippines was in trouble. Maybe you still do, and perhaps that is because the last election poll shows Senator Pacquiao moving into third place or something like that.
One local presidential candidate is quoted as saying that the surveys are to be laughed at. Winning by a miracle though is unlikely. I have made my living from anticipating which stock people were going to buy next. I play poker. For me, I like watching the prediction markets where people put their money on the table. Ok, the markets lost heavy on Hillary Clinton but that happens. Will it again?
Smarkets is a UK-based betting exchange that carries political prediction markets. The odds of Marcos winning the election is currently at 87 percent. If you want a good “miracle” bet, choose Pacquiao where one dollar wagered will return $65 if he wins.
Constantly asked “what do you think will happen in our economy if Leni/BBM will be the president?”, my answer is “up either way…Filipinos control the economy not any president…All we want is for the election nonsense to be over.”
Broad government policy has not changed since President Gloria Macapagal Arroyo set the government’s financial house in order beginning in 2005. Further, the policy specifics of both the Aquino and Duterte administrations were generally consistent. The economic results since 2010 have been on the same positive trajectory.
Foreign Direct Investment was never higher than for the past six Duterte years. But it was also never higher than for the previous six Aquino years. The same is true with annual economic growth and inflation, both of which remain relatively consistent—and beneficial—with peaks and valleys coming from external influences like oil prices, global financial “crises,” and war. Not any president.
Post-Covid and post the election silly season, the positive economic path that began in 2004 will continue. In 2004 the Philippine GDP per capita in purchasing power was $4,908. In 2019 it was $8,914, with consistent growth no matter who was president.
Read the following. “Bank deposits up 8.5 percent to P16 trillion in January.” There is a ton of cash on the sidelines since we have been hoarding money since January 2020. And what happens post-Covid?
“Wholesale prices of building materials in Metro Manila picked up pace after the capital was placed under the most lenient alert level. The latest Construction Materials Wholesale Price Index accelerated by 6.6 percent in March from the 5.2 percent expansion in February.” Demand pull inflation. For now, that’s good.
The gloom-and-doom in the US is justified. The despondency in the Philippines is due to politics. For those that want to sit in the mud of their political pessimism because of the election, I feel sorry for you. The other 112 million Filipinos are going to continue to build the nation and will prosper doing it. You probably won’t.
E-mail me at mangun@gmail.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis provided by AAA Southeast Equities Inc.