• ‘Pay us before we leave’



    THE anti-foreigner demonstrators should know the jobs that would be lost in their desire to drive out foreign businesses. The exodus by these employers to relocate their operations somewhere else outside the Philippines where they would be welcome would displace thousands of workers and economically dislocate their families.

    Like his supporters among these demonstrators, President Duterte also wants all foreigners out of this country but should also be reminded that the government should first settle the debts it owed foreign lenders. The government has long been dependent on foreign borrowings that had reached P1.23 trillion or $26.12 billion from 1995 to December 31, 2015, according to data collated by the Commission on Audit.

    In 2015 audit, COA said, “cumulative repayment as of the same period amounted to P426.78 billion ($9.06 billion) leaving outstanding balance of P803.81 billion ($17.06 billion).”

    Such borrowings proved expensive. COA said its audit findings showed “debt service expenditures for 2015 amounted to P53.25 billion inclusive of interest of P10.02 billion, commitment fee of P152.36 million, guaranty fee of P593.20 million and other charges of P369.71 million.”

    ADB to the rescue
    Of the government’s borrowings totaling P1.23 trillion in a 20-year period, P108.94 billion ($2.31 billion) was for 2015. Included in the total debts was $200 million which came from Asian Development Bank as “emergency assistance for relief and recovery from Typhoon Yolanda.”

    As Filipino activists demand the ouster of Americans from this country, they should be told that they could achieve what they want. But first things first: the government must first settle its mounting foreign debts to make the Philippines truly independent. Pay them now, not tomorrow.

    Even foreign funds that come in and go out through the stock market may be feeling the government’s antagonism towards them. Last week, they sold P19.994 billion of their portfolio on listed stocks but bought only P17.737 billion. This resulted in net selling of P2.257 billion.

    These numbers tell the public investors who trade on stocks that without foreign funds, they would be limiting their trades. A PSE weekly monitor estimated foreigners’ participation in the daily trading at 55 percent from October 17 to October 21 and at 57 percent from October 24 to October 28. Its year-to-date data showed foreigners’ trades at 51 percent.

    Are foreign funds finally realizing that it would be futile to continue staying in a stock market in a country where the government does not like them? They also are as practical as any Filipino investor who invests to earn much more than what banks offer them for their savings. They WILL leave.

    Foreigners need not be told to get out because they know when to leave and when to return. In short, they time their entry into and exit from the local stock market and any securities market for that matter.

    The public relies mostly on foreign funds in their daily trades. They buy when they feel their entry and sell to them at the right time. They are ruled sometimes more by instincts than by market fundamentals. The more research-oriented among the public may be more cautious than others even if the big traders are known not to trade big unless they know something about to happen.

    As a business reporter many years ago, I used to interview stockbrokers over landline telephone when mobile phone was not yet around. When I need an analysis, I sought them out for comments. I was to learn later on that my strategy was wrong. I should not have asked any of the stockbrokers or their analysts about a stock that either surged or fell.

    My mistake was asking one analyst about the effects of a forthcoming stock dividend yet to be declared by a listed company. I do not remember anymore the particular stock but I was told eventually that the analyst and his brokerage house benefited from “my tip.” I received a call from my “source” that I thought to be “reliable” asking me for more information about other stocks.

    The lesson I learned from this experience told me to study more the intricacies of the local stock market. The best news is not always the best investment guide. Something that usually happens inside the boardrooms may be hidden from the public. What it is may never be reported at all to regulatory authorities because listed companies simplify their disclosures by reporting only the dates of a board meetings but not what the directors have talked about.



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