I have recently come back from the Philippines, a place where this blog and project (such as the byalcblog and the byalcmath websites) was born. In fact, as my family comes from this place in a small town in the Luzon island, I have come to rest my bones mostly every summer in a very long streak of years.
I have come to think about economics and thus the blog was born. I had written down notes about BRICS, Russia, Hong Kong, China, Iran and Japan. To think about economics is a habit I have frequently applied and developed throughout my travels around the world. And, as for a fact, that is because of my calling as an analyst of geofinancial phenomena.
I had to think about the Philippines, somehow, even though I had never been accustomed to reading their newspapers. Some countries just don’t have great journalism – when it comes to be read and interpreted in a direct form, if some of you know what I mean. I can think about South Africa perhaps, where I often struggle to find relevant economic insights. To me, it’s been the same thing for the Philippines.
Therefore, I just roamed around and observed. And, mainly, I had to think about two main topics – monetary policy and the export of national workforce.
As good as it may seem, the filipino diaspora is the main reason why there can never be a strong monetary policy in the country. A strong currency can help develop stronger national interests, such as the growth of the private business sector as well as equity. But when it comes to workforce, the phenomenon is not just a “sale” of workforce. It is, in fact, a “leak”.
One way to see it, is that the leak of filipino workforce, or the diaspora, is exchanged in foreign currency. I have no clue where common sense got this from, but people usually say “at least there is circulating money”. Well, actually, what is happening is the equivalent of a foreign investment in the shorting of the filipino national workforce.
So what does that mean? As I have already pointed out, no national interests are guarded by the national currency. The job growth is strongly discouraged through the pumping of foreign capital. And that means, that all the money that is spent can only make the private sector grow if foreign capital sustains it. What all that results into is that there is no economic growth.
Is there a way out of it? As for a start, I’d begin with monetary policy and a healthier banking and financial system.
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