Killing in the streets

The economic briefing to preferred clients opened with the puzzler: “The Philippine peso closed at P51.47 as of Aug. 17, from P49.72 to the dollar as at end December 2016 — a -3.52% change. The peso is the worst performer in Asia — compared to the Thai baht that has appreciated 3.81% versus the dollar! But why is the Philippine Stock Exchange Index (PSEi) going steadily up, from a trough of below 6,600 in December 2016, to breach 7,700 in June 2017, and still climbing? Isn’t it that when the peso is down, the stock market is also down?”

Not to worry — we are hedged on the exchange rate. The Bangko Sentral ng Pilipinas (BSP), in its “managed float” regime, purposely wants a weak peso in these times of heightened global risk. As the peso slid to almost 11-year lows in June, Filipinos working and living abroad sent a three-month high of $2.467 billion in remittances, increased from $2.334 billion a year earlier, when the peso was in the P46 to the dollar levels (actually a decrease in volume). OFW remittances and business process outsourcing (BPO) have traditionally insulated the Philippine economy from external shocks by ensuring a dependable supply of foreign exchange.

Go with equities — buy now, the PSEi has climbed to the 8,000 level, with YTD return of 17.19%, in the esteemed company of Vietnam and South Korea, next only to Hong Kong and India. Invest in good, stable companies that show faith in Philippine growth. Private businesses in these risky times have bravely invested huge capex to contribute to national development more than for profit. A good portfolio mix would be about 60% equities, 23% bonds and 10-15% cash.

Get some dollars, anything below P51. What, despite President Donald Trump, and what harm he might do to America? What if he is impeached? An article in Newsweek thinks Trump could be impeached in 2019 or sooner, after the 2018 mid-term elections when Democrats would be stronger in the House. Trump would just be six votes shy of being convicted by a two-thirds vote at a Senate trial, with 48 Democrats and 12 Republican senators who have shown a willingness to take on the president when they believe he is in the wrong (Newsweek, 08.17.2017).

Trump’s fiscal reform platform is stalling in neutral, hampered by his many missteps: in January an executive order attempting to ban travel from several Muslim-majority countries; his June withdrawal from the Paris Climate Accord; allegations the Russians tampered with the US presidential election in his favor; his embarrassing failure to rescind and replace the Obamacare health package; and only last week his racist response to the white supremacist violence in Charlottesville, Virginia, protested by angry crowds in the streets and in all media (Forbes, 08.16.2017). But perhaps the most telling of Trump’s failure as “CEO/COO” of America is the ugly breakup with the American business community by individual resignation of corporate CEO-advisors to Trump and the voluntary disbanding of two business advisory councils now openly disenchanted with him — the Strategy & Policy Forum and the Manufacturing Council, which hosted many of the top corporate leaders in America (Washington Post, 08.16.2017).

“Racism and murder are unequivocally reprehensible and are not morally equivalent to anything else that happened in Charlottesville… the President should have been — and still needs to be — unambiguous on that point,” CEO-consultants to Trump said (Forbes, 08.16.2017). We are not like that, even Republicans are now saying of Trump (CNN 08.18.2017).

“We (Filipinos) are not like that. We have been disgraced by this culture of impunity a long time ago… it should not happen,” Vice-President Leni Robredo stated when asked to comment on the killing of 32 drug suspects in Bulacan overnight from Monday to Tuesday last week (The Philippine Star, 08.18.2017). Obviously, she and many Filipinos were shocked that President Rodrigo R. Duterte said policemen should kill “another 32 every day, maybe we can reduce what ails this country,” referring to the “One-time-big-time” drug clearing in Bulacan. Duterte also warned he would shoot down human rights advocates obstructing his campaign against illegal drugs.

“The statements of the President that called for increasing the body count in police operations in the course of the drug war coupled with the off-the-cuff calls to shoot human rights monitors further exacerbate the climate of impunity that has characterized this administration,” the Commission on Human Rights (CHR) Chair Jose Luis Martin C. Gascon said.The international Human Rights Watch investigations revealed that police routinely execute drug suspects and then cover up their crimes by planting drugs and guns at the scene. Efforts to seek accountability for drug-war deaths have gone nowhere, the group said.

Retired Archbishop Oscar V. Cruz, former president of the Catholic Bishops’ Conference of the Philippines (CBCP) commented on the daily reports of summary killings in the country saying, “Whether we like it or not, this mentality is creeping in, especially in the minds of our young people… that killing people is not a problem and that is worrisome.”

Senators crossed party lines on Friday and are set to conduct an inquiry into a recent surge in drug-related police killings following the apparent summary execution of a 17-year-old boy by police in Caloocan, The Philippine Star reported (08.19.2017).At last!

And on Friday, “the peso continued to weaken against the dollar, shedding another 13.5 centavos (closing at P51.49) amid fresh terrorist attacks in Barcelona as well as the debate over the pace of interest hikes by the US Federal Reserve (The Philippine Star, 08.19.2017).” The PSEi tumbled 56.02 points closing at 8,016.73 “echoing the downtrend in global stocks as escalating worries about Trump’s ability to push through its economic agenda rattled investors.”The reasons cited by analysts were external threats to the financial markets and to the economic growth of the country dependent on the US and its chimeric Donald Trump. Certain realities in our country’s “New Normal” have been cautiously avoided — by analysts, traders, bankers and others who might have personal interests to protect.

Like Big Business, enjoying the opportunities from blood being in the streets — double-digit profit growth for businesses and highs of GDP growth for the country cannot ever justify killing in the streets.

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com