Monday, April 15, 2013

The Philippines . . . investment grade for the first time in its economic history!

Click here for the official story:

The challenge, of course, is for our national government team to keep improving the sovereign credit rating of the Philippines until we are a "triple A" or "AAA" credit like Canada, Australia and Singapore. That is still a long time coming, if ever at all, given the thoroughly irresponsible spending habits of our public officials. What is clear today is that the Philippine economy, inside and outside the Philippines (i.e., the Overseas Filipino Workers' or OFW remittances), is generating enough (and being overtaxed, of course) to support the parasitic government and to service the national debt. What is also clear in the horizon is a fat, inefficient and corrupt government at virtually every level that is poised to abuse this recent economic distinction by ratcheting up the demand of (a) more socialist programs (i.e., unsustainable subsidies to the poor folks who need to be neutered to stop shitting babies like goats and rabbits) and (b) a more obese, inefficient and corrupt government. So, while P-noy's team appears to have the supply-side of the credit rating issue under control, they have only begun to address the specter of the undisciplined demand-side run amuck, which could easily lead the Philippine economy down the path of Greece and Spain.

Beware the politician with the slogan of "free college education for all" or "affordable healthcare or health insurance for all" and the like. Beware the increasing pork barrel allocations in the Lower and Upper House of the Legislature, as well as at the Presidency (i.e., PDAF, DAP or whatever else it is called or labeled). Now that it's cheaper to borrow money, there is more pork to go around and spend freely. Beware the government bureaucracy that hires more bureaucratic leeches, now that there are more spoils from the taxpayers to spread. Any of these irresponsible and unsustainable practices in government will intensify under a false sense of economic well-being and perceived abundance in the context of the recent investment grade sovereign credit rating--and we'll come crashing down the economic death spiral just as we are starting our ascent.

Not surprisingly, ERAP, the convicted plunderer who has neither the legal ("legitimized" only by the gaping lapses of the COMELEC and the Supreme Court) nor the moral basis to assume the post of the mayor of the City of Manila, is leading the way towards fiscal imprudence and downright abuse. Just recently, he triggered the economic death spiral of the City of Manila by signing an ordinance that will raise real estate taxes by as much as three hundred and fifty percent (350%) as well as increase business permit fees--well beyond the rates of comparably more progressive cities in Metro Manila. He is squeezing the last ounce of blood from property owners and business enterprises, and throwing the ever-diminishing hard-earned livelihood of the middle-class into a bottomless cesspool that enables him to throw crumbs at his squatter (non-tax generating) constituency and to re-energize and perpetuate his own corruption addiction and that of the deeply entrenched bureaucratic kleptocracy known as Manila City Hall.

Now is the perfect time to clamp down on the demand-side, among other things. Let us precisely bankrupt the City of Manila to force City Hall to restructure, to streamline and to rehabilitate itself from its unsustainable addiction to excessive taxation. Bankruptcy means Manila City Hall will have to live within the economic dictates of the taxpayers--so much for the bogus public hearings that didn't bother with the objections of the taxpayers. Bankruptcy will compel City Hall to focus on reducing the demand side of government versus increasing the supply side of government (i.e., increasing taxes and business permit fees). For starters, no more borrowing, no more fixers, no more contractuals and reduce City Hall’s headcount by fifty percent (50%)—less heads means less criminals and, yes, less electricity bills to pay. Retire City Hall employees without separation pay, particularly if the City of Manila is bankrupt. These bastards should not be given a centavo of separation pay for all these years of wholesale corruption. No more subsidies to squatters other than a bus ticket to their home province, so they can return home, till some land and be truly productive (other than making more malnourished babies like goats and rabbits). Streamline the administrative and procurement processes and impose/enforce punitive measures against erring officials—zero tolerance on corruption. Restructure the legitimate debt of the City of Manila, negotiate more favourable terms, including substantial “haircuts” and refrain from paying those government banks supporting City Hall’s debt addiction—it’s time to sever these unholy alliances. Reduce or eliminate the fire department and provide incentives to develop a private volunteer fire brigade in each barangay. No more junkets and so forth and so on.

Abolish the thoroughly useless Senate. At least P200 million in pork barrel per Senator or a total ofP4.8 billion a year would be saved. Reduce the current 212 congressional districts to a maximum of 50 (i.e., 1 for every two million constituents), and scrap the party-list representatives (what a scam). At least P70 million in pork barrel per Congressman or a total of P11.34 billion a year would be saved. And that's just the tip of the iceberg. It doesn't take a genius to see that many government agencies should not exist at all and all the other government agencies can be streamlined by at least 30% (50% in the case of Manila City Hall) and finally get government employees to earn a fair day's wage for a fair day's work. Criminalize squatting and informal settlers, and send them off to their respective provinces to till the land. Reinstate capital punishment. It should be as public and gruesome as possible to make it an effective deterrent. Introduce caning (like in Singapore) and make it also as public and as gruesome as possible. Quit pussyfooting on the Reproductive Healthcare Law. Free college education to the only child and tax (I mean tax punitively) the parents of every child in excess of the first--at least until such time the population is under control. Then, maybe then, the Philippine economy does not evolve from investment grade into the economy of Greece or Spain today.

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