Sick Man of Asia get's better

Interesting article in Bloomberg by old Asia hand Bill Pesak.

Is the Philippines on the way to recovery?

----------------------------------------------------------------

S&P’s Reward Awaits One-Time Sick Man of Asia: William Pesek


It is often a fool’s errand to predict turning points in the more erratic Asian economies. Nowhere is that truer than the Philippines, whose greatest consistency seems to be disappointing the optimists.

With Europe sliding, America limping, Japan shrinking and the once-unstoppable China slowing, it’s anyone’s guess where the Philippines might be in three years. At the risk of looking foolish in, say, 2015, I think it will be in a far better financial place than it has been in a decade.

My faith rests on four things that Benigno Aquino has done since assuming the presidency in June 2010. These were moves that mark a keen understanding of what ails Asia’s 12th-biggest economy and flashes of courage that were absent in his three predecessors.

First, a nuanced focus on the economy. Gloria Arroyo seemed infatuated with raising gross domestic product during her tenure from 2001 to 2010. It was just talk. Arroyo, like Joseph Estrada (1998-2001) before her, was all about the cult of GDP that beguiles many Asian leaders. This obsession masks big cracks in economies with headline-grabbing growth rates that serve mainly to deflect political opposition.

One in four Filipinos (PGDYTY) lives on less than $1.25 a day. The Occupy Wall Street movement harps on the 1 percent. In the Philippines, it’s more like the 0.01 percent of politically connected citizens who reap the spoils of growth.
Moving Swiftly

Aquino wants to tighten mining rules, cut tax breaks and review contracts to make sure average Filipinos benefit from natural resources and limit the industry’s impact on the environment. He is upgrading infrastructure to attract foreign investment that would create jobs.

The president moved swiftly to get a handle on the long- term budget deficit. That’s a vital step to reducing the waste and graft at the root of the nation’s dysfunction, but also winning the investment-grade credit rating that would accelerate the process.

Second, attacking corruption. Aquino, 52, is both the right guy and the wrong one to fight this battle. His mother was former President Corazon Aquino (1986-1992), who made up with integrity what she lacked in governing skills. She was the moral compass after two decades under dictator Ferdinand Marcos. The problem is that the Aquinos are among the major land-owning families that benefit from the extreme concentration of wealth.
Marcos’s Billions

Benigno Aquino has had no qualms in going after the billions that watchdog groups say Marcos looted. Marcos is the man Aquino’s opposition-leader father was trying to unseat when he was assassinated in 1983. The Marcos family has been staging a political comeback in recent years. Marcos’s wife, Imelda, she of the infamously large shoe collection, now sits in the House of Representatives.

The president is holding Arroyo, her husband and her son to account for alleged corruption. Aquino also is working to oust Supreme Court Chief Justice Renato Corona, a last-minute Arroyo appointee, who faces accusations that include favoring Arroyo in court decisions. While some in Manila smell an Aquino-versus- Arroyo family feud, I sense a bold effort to clean up the nation’s tainted judiciary.

Third, addressing overpopulation. The nation’s ranks are outgrowing the number of good-paying jobs being created, forcing more and more Filipinos to work overseas. Any talk of family planning is suppressed by the powerful Catholic Church, which is too politically active for comfort. Aquino risked the Vatican’s wrath with a “responsible parenthood” bill. Let’s hope more such steps are on the way.
Exporting People

The remittances that expatriate Filipinos send home boosts growth in the short run. But the money does little to build a foundation for organic growth and is a dangerous addiction that must be kicked. Gaining control of the birthrate is a key part of the solution.

Fourth, a gutsy stance toward China. In Asia, it is striking to hear what politicians say publicly about China’s growing dominance and what they really think. No one wants to anger Asia’s nascent military superpower or offend the biggest customer for their exports. Aquino is risking just that as he demands fairness in China’s claims to disputed islands in the South China Sea and cozies up to the U.S.

The Philippines is among a handful of nations claiming the resource-rich Spratly Islands, along with Malaysia, Vietnam, Brunei and China. Aquino refuses to bow to China’s demands, something that has enraged Beijing and prompted calls to punish the Philippines economically.
Balancing Act

China’s rise poses a dilemma for Asian leaders. Aquino is showing Asia there’s scope for approaching China as a peer, rather than a subordinate.

Of course, the Philippines (PHLFUDRT) has demonstrated a unique ability to scuttle the most virtuous of cycles. All too often, its eccentricities pop up to remind investors why it’s often called the “Sick Man of Asia.” This track record is a big reason the Philippines is rated BB by Standard & Poor’s and Ba2 by Moody’s Investors Service. Both ratings are the second- highest for junk bonds.

Credit raters are perhaps too busy downgrading the top 10 economies to reward progress in the smaller ones. Investors who act in anticipation of Philippine upgrades are unlikely to regret it. Sometimes, foolishness has its benefits.

(William Pesek is a Bloomberg View columnist. The opinions expressed are his own.)

Bill Gates on H1B Visa

Gates Rakes Congress on H1B Visa. I am paraphrasing an article from www.internetnews.com on H1B Visas, as it seems people misunderstand Obama's role in the harm visited upon US Citizens by H1B visas. Instead of jumping into the bandwagon of people who think that Obama is the source of all the unemployment problem just because they said something hilarious, we should use more critical thinking that our education at UP gave us.Also, be careful about being persuaded that it is ok to hate Obama for his "black ass".

If you did not emigrate to the US in the 1960's and 1970's, you did not get a taste of overt racism. During those times, if you were not white and male, all you can get are clerical jobs no matter what your college diploma from the Philippines shows, even from UP. I know because I and several of my co-workers at the Pacific Telephone Co. went through that experience. It took the work of the Black People to change attitudes on racism and we Filipinos, benefited from it, even more than the black population at large. You want to go back to that time? Be careful what you wish for.Point 1: Who is for H1B Visas - Here is what Bill Gates says:

"The whole idea of the H1B thing is don't let too many smart people come into the country. Basically, it doesn't make sense," Gates said.

The lack of H1B visas is causing problems for Microsoft's hiring, he contended.

"You can't imagine how tough it is to plan as a company where we say, 'let's have this engineering group and staff it.' Note that Bill Gates is completely for unlimited influx of immigrants through the H1B program. - He does not even have the courtesy of mentioning anything about qualified US Citizens who are unemployed.Point 2: Bill Gates assigns the blame: the core of the problem rests with members in Congress who want to step back to U.S. isolationism. - Bill Gates definitely identifies who is responsible for the H1B program, the US Congress. Obama does not have the power to act unilaterally to mandate changes in laws. He did not sign the H1B visa law. Congress has to act to repeal the law or make sure that the US is not issuing H1B visas beyond the need for them and without taking into consideration the effects on US employment.I do wish that Obama shows moral guidance so that Congress does its job.

=======================

WASHINGTON -- For Bill Gates, it's just another week: Host Bono over the weekend, give an almost two-hour keynote at WinHEC on Monday and tweak Congress today.

What's politically eating at Microsoft's chairman and chief software architect? H1B visas.

Gates was on Capitol Hill to promote science education, research and development funding and to participate in a Library of Congress panel discussion with Sen. Patrick Leahy (D-Ver.), Rep. David Drier (R-Calif.), Princeton University President Shirley Tilghman and Phillip Bond, under secretary of commerce for technology.

When asked what he would do if he could make the laws, Gates quickly stated: "I'd certainly get rid of the H1B cap."

An H1B visa is a non-immigrant classification used by foreigners who are sponsored and employed in specialty fields such as technology. The current H1B ceiling is 65,000 workers per year, following caps as high 195,000 employees in the early 1990s.

The huge cuts, prompted by national security concerns and protectionist lawmakers who think the jobs should go to Americans, are a longstanding sore point for the technology industry.

"The whole idea of the H1B thing is don't let too many smart people come into the country. Basically, it doesn't make sense," Gates said.

The lack of H1B visas is causing problems for Microsoft's hiring, he contended.

"You can't imagine how tough it is to plan as a company where we say, 'let's have this engineering group and staff it.' You get a few and then you go through these periods where nobody can come in," Gates said.

He continued: "So, we'll have Canadians waiting at the border until some bureaucratic thing happens where a few more get opened up. That's just wounding us in this global competition."

According to Gates, the core of the problem rests with members in Congress who want to step back to U.S. isolationism.

"It's very dangerous because you get this reaction: 'Okay, the world is very competitive, let's cut back on trade; the world is very scary, let's cut back on visas,'" he said.

Leahy agreed with Gates, but Drier politely demurred.

"The post-911 effort to cut down on visas, I think that's a bad mistake, I think we should be increasing them," Leahy said. "We should be opening our borders more, not closing them. It does not improve the security of the United States by thinking we can become Fortress America and not interact with the rest of the world."

Drier countered: "We can't be so naive as to believe that there is not a very serious border security problem with which we have to contend. We need to ask ourselves why it is that so many of these people who are educated at Princeton and other great institutions, why it is they leave?

He added, "It behooves us to spend time looking at our polices that create disincentives for people to remain working right here."