Let’s study Argentinian option

Standard and Poor’s, an international credit rating agency, has just threatened us again with a downgrade unless Congress enacts some of those revenue raising measures. S&P is merely doing its job of looking out for our creditors. S&P is the second ratings agency to so threaten a downgrade. Last month, UK-based Fitch also warned that there would be material implications for the ratings outlook if the revenue measures were not passed.

But other than cower in fear, the administration has done nothing more proactive than to echo the warnings of the ratings agency in press releases designed to put pressure on Congress. I think it is time that government starts making threats of its own. A team of economic managers should be dispatched to Buenos Aires to study the Argentinian option.

Que horror!!! Que barbaridad!!! Does this mean we are considering something as drastic as standing up to our creditors? Well, yes. The third world debt problem, like the tango, takes two to happen. We were foolish to borrow beyond our means. Our creditors were foolish to lend us without regard to our increasing incapacity to pay without courting a revolution.

Actually, just because we are studying the Argentinian option does not mean we will take it. For one thing, Argentina can afford to tell the IMF to go fly a kite because in a sense, Argentina is too big an economy and country to fail. Argentina can afford to refuse to sit down with its bank creditors even with IMF prodding for the same reason. I am not sure that if we did the same thing, the IMF and the banks will not roll over in laughter.

Still, it makes sense not to close any option, no matter how drastic, to respond to our foreign debt problem. Argentina told its creditors to take a drastic haircut, no ifs and no buts and no negotiation. Thus far, the strategy seems to be working. Because Argentina’s creditors have not accepted Argentina’s terms, they are not being paid a cent. This is helping Argentina generate enough revenues from taxes to fund essential social services and even post a fiscal surplus. This strategy is giving Argentina’s economy a breathing spell.

The problem with the third world debt crisis is that middle income countries like us have little options on the table. The poor countries are being given debt relief. In fact their debts are even being condoned. This reminds me of the situation for middle income families in the matter of health care. The poor families get assistance from charities and the state. Middle income families who must deal with cancer, for instance, have nowhere to run to until they become paupers in the process of getting treatment.

Same thing for the Philippines. Our creditors will not hear of debt relief, until after they are sure they have extracted every last ounce of what they can get from us. They don’t care if our children grow up sickly and ignorant, or if our peace and order goes to pot for lack of funds for the police. We simply must service our debt as scheduled – unless – they are reasonably assured that our leadership will not hesitate to use the Argentinian solution.

The mere act of sending a high powered economic team to Buenos Aires to consult with the Argentinian government on their approach to their financial problems should make our creditors wonder what we are up to. We don’t have to use the Argentinian solution at all, but the mere fact that we are publicly known to be seriously considering it as an option should be sobering for our creditors.

Or maybe, we can start an international movement with Argentina that will rally similarly situated middle income nations to focus attention on our peculiar problem. Heaven knows we need an international approach to our problem all these years. We missed a golden opportunity to clean our books of Marcos-era debts that only ended up in Swiss bank accounts when Tita Cory repudiated any form of debt renegotiation. We are not getting the attention we need because we have taken a position that makes it easy for our creditors to take us for granted. The time has probably come when neither we, nor they, have a choice.

As Sen. Flavier would say it, Let’s DOH it.

Medical Tourism

It was reported last week that a big block of Asian Hospital’s shares of stock was acquired by a Thai hospital group that is at the vanguard of Bangkok’s highly successful foray into medical tourism. This is just as well. Filipino doctors are known here and abroad for their skills but it took a Thai company to discover the profits offered by medical tourism.

Briefly, medical tourism involves providing medical services to foreigners who come to both see and enjoy the country as well as get well. In the current issue of The Economist, there is a report about how India is also getting into medical tourism.

The Economist reports that "according to rough estimates, India attracted about 150,000 medical tourists last year. In the international market, it lags behind Thailand, which attracted as many as one million last year." That should be a number that will prove attractive to our medical entrepreneurs. The Indians, according to the magazine, sent a delegation to Bangkok, "trying to build links and learn more." Asian Hospital in Alabang is one step better – it is partly owned by the Thais who introduced medical tourism in this part of the world.

Actually, the Asian Hospital had been trying to attract patients from Guam and the nearby islands. Its world class quality service and the opportunity to shop and holiday here and visit relatives should be attractions enough. Manila is also closer to Guam than any state-side facility.

Hopefully, we are able to put all our resources together in a single unified effort to pursue medical tourism in earnest. Between the brand new Medical City in Pasig, Asian Hospital and St. Luke’s in Quezon City, we should have enough hospital beds and world certified specialists to provide high quality medical care. Once we build enough volume, it is possible that our medical workers will elect to stay in the country because medical tourism will enable their hospitals to upgrade pay scales.

Pinoy doctors and nurses have earned a good reputation in many places abroad long before the Thais and the Indians did. I still find it difficult to accept that as in many endeavors, we lost our headstart somehow. We have to get back in the race.

Best Friend

From Sonny Mendoza, musings on a best friend.

WHEN I was lost you were there,

When I was down you were there.

When I was heartbroken you were there.

When I got really sick you were there.

ABA, hindi kaya ikaw ang malas sa buhay ko?

Boo Chanco’s e-mail address is [email protected]