Mining is all hers

It was a splendid, eloquent speech that Ralph Recto delivered as his valedictory, though he did issue one troubling warning to his fellow senators:

Barbarians will soon appear at the gate to tear this institution down. Believe me, they shall not pass.

A bolder prediction of the Cha-Cha Express being revived couldn’t have been made. Perhaps by the State of the Nation Address? One sign is how this pans out: Shakeup in Cabinet gets going after polls.

Joker Arroyo is shocked, shocked! House opposition members don’t want a company union.

Namfrel: 8-2-2 is unlikely to change (see the PCIJ blog report on Halalang Marangal’s initial findings on the elections). Writing’s on the wall. Members of the 13th Congress (in the House, at least) can no longer be bothered to show up for work. Goodbye, cheaper medicines act.

While I don’t agree with his politics, I am very happy Crispin Beltran is back in the House. His detention was a scandal.

A word on the economy: please read John Mangun’s views (and his credibility, I think, even if you don’t know him, rests on his having predicted the stock market boom), which explains why the markets are so buoyant, and why it’s neither surprising nor unpredictable:

The fact that economic growth roared in the first quarter should have been expected.

Over the last year, interest rates have decreased to the lowest level in modern Philippine economic history. When interest rates go down, money is freed for other wealth-creating purposes like spending and expansion.

Furthermore, the money supply has grown significantly over the last year. An increase in money supply, the amount of cash in the system, translates into inflation and higher prices or investment of all types. And everybody, including the “experts,” know that inflation is virtually at a standstill despite very high fuel and energy costs.

Granted that all of these factors bear on one another, it is unlikely that the stock market would rise in times of high interest rates and high inflation. However, the 50-percent increase in the stock prices since July 2006 is the best indication of the favorable climate that the Philippines has worked in for a year.

Analysts said that the 150-point increase in the PSE Index on Thursday and Friday was in reaction to the “surprise” of the gross domestic product (GDP) numbers.

Wrong. The 1,500-point increase was in anticipation of the first quarter GDP. Thursday and Friday market action was primarily from people who missed the 20-percent increase of stock prices in 2007 who suddenly jumped on board the train that left the station in July 2006.

The most amazing quote I read about the market/economy was this: “The market’s upbeat on higher-than-expected GDP growth that may translate to robust corporate earnings growth in the next few quarters.”

I will not embarrass the person who said this by naming him or her. Why is this comment so inaccurate? Simple common business/economic sense.

Look. Ask yourself this question: what is it that makes up the numbers that create a 6.9-percent year-on-year increase in growth? Answer: positive and profitable economic activity. Meaning, the GDP is high due to substantial growth in corporate revenues and earnings in the first quarter. Where has this person been hiding? Didn’t he/she see double-digit corporate profits for each of the last two quarters?

The “robust corporate-earnings growth” created the robust economic growth.

In other words, as he’s said, give credit where credit is due, and credit is due solely and firmly, to companies that have fine-tuned their governance and boosted profits, found opportunities, maximized them, and made themselves, in turn, attractive to investors.

I’ve gone into my criticism of the credit-grabbing instincts of the President often enough but it bears repeating: what irks me is credit gets grabbed by the administration for the things it’s not responsible for, while ignoring the things it’s definitely responsible for -and not doing enough in, such as customs, the BIR, not wasting government resources on boondoggles like Cha-Cha, etc. And the foreign observers in the know have been saying they know the real score, though of course they say so in bureaucratese:

“Unless privatisation or public-private investment partnerships are extremely successful, there will be considerable uncertainty whether fiscal consolidation can advance further without additional revenue measures,” Moody’s said.

As the World Bank (just a matter of time before it elbowed its way to the microphone) says,

The budget deficit of the national government — as distinguished from the overall public sector — fell to P64.8 billion last year from P146.8 billion in 2005. The government aims to cut it further to P63.0 billion this year, but fell short of its tax collection goal in the first quarter.

A World Bank study titled, “Philippines: Invigorating Growth, Enhancing Its Impact,” has noted the need to translate improved macroeconomic fundamentals into sustainable growth.

The study says the turnaround in the financial market “has to translate into higher overall investment, which has been stagnant in real terms and has declined as a share of GDP [gross domestic product] to below 15 percent.”

“This is of concern, since higher economic growth is needed to generate more jobs and reduce poverty more rapidly, and it is difficult to see how sufficiently robust growth can be sustained at present levels of investment,” it adds.

But time and again, there’s the shrill bellowing of those who complain that come on, some credit must be due the President? It can’t be a coincidence -the happy numbers in some sectors, and her being in office?- I’ve actually heard some economic observers say so, but let’s assume that it can’t all be a coincidence.

Now this is one department where I can say credit goes solely to the President: the mining policies of this government. It’s all hers. A definite bastion of support for her within the business community comes from mining interests.

Tony Lopez says it’s going to boom, and the boom has been long in coming (two years ago I visited Puerto Princesa City and the hotels were crawling with people setting up stakes in mining; the provincial government had already basically carved up the province into districts to facilitate claims). Much as these policies will cause trouble with environmental groups, advocates of tribal minorities, the NPA (who will be edged out from places where mining takes place, as firms beef up their security), it’s really tough, I think, to argue against it: the wealth is there; and it’s not a very convincing option to say, keep the wealth underground in the name of glorious Marxism-Leninism-Mao Zedong Thought (which is only waiting to go into mining once its side wins) or for the Greater Glory of a God whose altars and chalices are made of gold from the ground.

The challenge instead, is a practical one: keep as much of the profits circulating in the Philippine economy, and ensure that at the end of it all, mining areas aren’t reduced to unproductive wastelands (when I visited Toledo City in Cebu, a place that’s never recovered from the shutdown of mining operations there, I saw with my own eyes a cautionary tale of what happens when the former boom goes bust).

Some comic relief (but pointedly so) from Carla Montemayor on voting as a means of needling people:

How about Fr. Ed Panlilio? Partly yes, I would say. That, my friends, was not just a slap to the best-known daughter of that province-that was a karate chop-helicopter kick combo with matching pompyang.

Here’s an interesting article: Master English—but don’t neglect local languages.

In the blogosphere, reactions to the Recto concession speech: A Simple Life regrets he lost; Patsada Karajaw most definitely has no regrets; Lovefull Indeed says Recto simply picked the wrong party -them’s the breaks. starfish hands looks at the Recto defeat from the point of view of Batangas politics. Uniffors says Zubiri should take a cue from Recto.

A thoughtful piece by The Magnificent Atty. Perez explaining the political landscape as seen from Cebu.

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