Thursday, April 2, 2015

RP economic growth taking root in the countrysides--no thanks to Pnoy

I am amazed at the speed development has entered the countrysides. Many people are erecting malls and buildings with spaces to be leased. This just tells you of the enormous demands for commercial space. This means that Filipinos entrepreneurs are sprouting almost everywhere and businesses are expanding.

Now, wait a minute. Before anyone, and that includes Pnoy tries to get some credit for this, let me be blunt and say that this economic growth and expansion was not brought about by this administration. This is actually a fifteen year old thing in the making. It is now bearing fruits because of two things: slowdown of the economies of the US and Europe and the shift of wealth from West to East. Yes, hot money is beginning to re-enter the US economy but because investors have seen the condition of the Philippine countryside, and the enormous market this country has, some of these hot money are now parked here, in the banks. Liquidity allows banks to play, and play they will thru placements and of course, granting or giving of loans. The low interest rates given by the Bangko Sentral is pretty much encouraging people to get more loans. The more people entering into loans and investing these in profitable ventures, the more expansive this growth becomes.

The local bourse is performing very well, which means that people are actively reacting to market stimulus. Consumers are pretty much using their monies to buy things. The more people buy, and the more diverse their choices are, the more sustained this growth becomes.

Again, let me be very frank and say that this is NOT brought about by this administration. This is a natural consequence of the existing condition of the global financial system. Investors are seeing dollar signs in the Philippines. However, this has its time limits.