Budget Secretary Ben Diokno must have been tired and piqued by all the incessant questions being raised on the peso’s exchange rate during a recent forum. I know Ben and he doesn’t normally lose his cool. But when he blurted out that we have experienced P55 to $1 and we are still alive, it was clear the pressure is getting to him.
“Let us not scare ourselves to death. It’s manageable, it’s being handled by the BSP. We’ve seen 55 before and we’re still alive,” Secretary Diokno told a recent forum hosted by the Foreign Correspondents Association of the Philippines.
That sounded pretty much like former DOTC Sec Jun Abaya responding to repeated questions about traffic jams by saying traffic jams haven’t killed anyone. It shows lack of empathy… and they forget that in the public arena, ”ang pikon ay talo.”
Ben must have realized what he said didn’t capture the essence of the situation. So he quickly added “But it’s the speed of adjustment that worries us.” Indeed, that’s worrying Finance Secretary Sonny Dominguez too, but Sonny expressed strong faith in the ability of the BSP to use its arsenal wisely.
Of course Ben isn’t afraid of 55 to 1 because he was also budget secretary during the Erap administration when the peso hit that level. However, Ben shouldn’t forget Erap got impeached and thrown out of office by EDSA 2.
Still, Ben is right. We should be able to survive 55 to 1 and we shouldn’t obsess about the falling peso. Many economists are even saying that it may be good for the economy. A depreciated currency improves our export competitiveness.
Ben’s big mistake is mentioning a number at all: 55! Given his position in the administration as an influential economic manager, he may be seen as telegraphing a target exchange rate. I don’t think they have one, but even if they do, he should not broadcast it.
By even mentioning 55, forex short sellers may use that number and make it a self fulfilling prophecy. Again, it is not doomsday if this happens, but people see the exchange rate as a measure of the administration’s competence in managing the economy.
Our economic managers must take lessons from officials of the US Federal Reserve. They are so careful about every single word they utter that analysts and business writers carefully look for messages between the lines… what they think they see becomes the opinion of the writers, not the Fed officials.
By bringing up 55 to 1, the next question is: how will this impact on the administration’s Build Build Build program? After all, Ben is its most ardent power point presenter. Indeed, it would be interesting to find out what exchange rate they used in computing next year’s budget and in planning BBB.
A cheaper peso means incurring a bigger loan value in peso terms from China and Japan. Does this affect the hurdle rate NEDA uses in evaluating project proposals?
Maybe at 55 to 1, the order of priorities in that ambitious list of infra projects should change. Those that are marginal to begin with, like the Mindanao Railway or the Subic-Clark railway, may be seen as nice to have projects that make absolutely no more sense now.
Then, will the tax reform package have as much oomph at 55 to 1? I am sure they used a lower number in designing the package. What happens if Ben’s 55 turn out to be prophetic?
That’s the problem, Ben, with giving a number, even a theoretical one. More questions about more details crop up. I guarantee you will trip up even more as you try to explain yourself away.
So, it’s 55 to 1… by when?
Good experience
I got a reaction from Peter Chong, a Singaporean married to a Filipina, about a column I recently wrote on healthcare. He said he has had good experience with our hospitals. That’s good news that deserves to be shared.
I read with interest your column of August 16 in the Philippine STAR. I am surprised that there is a law penalizing hospitals demanding deposit before treatment.
I am a Singaporean retiree living in Baguio City. I would like to share with you my experience here and in Singapore.
I had been to St Louis University Hospital emergency and admission on two occasions. On both occasions I was never asked for a deposit before triage and subsequently admitted into the ward.
On the occasion I was hospitalized for pneumonia, I was there for five days. And I was never asked to pay until prior to being discharged.
Last year I had a fish hook pierce my hand in Paracelis, Mountain Province. I went to a hospital to get the hook out. Again, I was not asked for a deposit. I did not realize it then, but the staff on duty were only nurses. They got the hook out with minimum fuss. I was asked to pay for the material used and the fee was P100. I could not believe it. Most important I did not have to even wait for treatment.
A few days later, I was in Bontoc. I decided to have the dressing changed at the Bontoc Hospital. Again deposit was not required. I saw the doctor who decided that I needed an anti-tetanus injection. The treatment was done in no time at all.
Now experience in Singapore:
In 2014, our domestic help cut her thumb severely. I rushed her to hospital. The first thing was to register her and pay S$200 deposit even before triage.
After registration it was a long wait before triage. After that another long wait before seeing the doctor for stitching. All in all, it took four hours and cost a few dollars more than the deposit.
You have done good research on our government medical service and Medisave and MediShield. Truthfully I am not very well versed with all the details.
When I go to government polyclinic for treatment, the bill will show the full amount and the subsidy given. As a senior citizen I get another 50 percent reduction in the bill. However, I cannot remember if this extra 50 percent reduction is given for more serious treatment like kidney stone removal.
For certain treatments, I can use my Medisave, which is my saving in CPF (Central Provident Fund) to pay for the out of pocket amount.
Mr. Chanco, to me, seeing a private doctor in Baguio City is cheap. His professional fee is P200-P300. It is the price of medication that is most daunting. A single course of antibiotic could be four or five times the doctor’s fee.
Yes, I know there is generic medicine available. But why is non-generic medicine so expensive in the Philippines even compared to buying in the private pharmacy in Singapore without government subsidy?
Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco