The European economies are in financial dire straits because of unsustainable welfare state policies. The answer is not to lend money but to support the call for financial austerity. This means slashing entitlements, free lunch programs, subsidies, privatization of public enterprises, elimination of regulations that have to be enforced by a fat bureaucracy. Lending money will not help promote global stability – instead it will just prolong the agony. It will not be long before the IMF will come back for another round of donations.
THE PHILIPPINES NEEDS BSP LIKE TETAY NEEDS GENITAL WARTS.
If the Aquino administration really wants to help the Eurozone countries in financial straits – it will be better to terminate all existing ODA from the EU – and return all funds to the EU taxpayers – let us stop enabling mendicancy.
Shield Who? From What Economic Fallout?
What shielding overseas Filipino workers from any possible economic fallout is BS Aquino talking about – the Philippines is ground zero for ASEAN’s economic laggard – how much more of an economic fallout do you really want? Is Henry Sy worried that there will be less Filipino remittances spent in Shoemart that will ensure he remains the Philippines richest man?
Workers who deliver value to companies are the first to be retained during an economic fallout – nationalities or country of origin notwithstanding. And that’s not because BSP is able to lend the IMF money for Euro parties.
The OFWs are working in the scorched deserts of Iraq and Saudi Arabia, or lying low in the civil wars of Egypt, Libya, Syria – demanding not to be returned to the Philippines because the economic fallout in Manila, Cebu, Davao and all its islands is worse than any Arabian despot. A country of slaves – whether at home or abroad – but at least nagdidildil ng hamon at keso sa Paris, London, Hong Kong, New York, San Francisco, Los Angeles – rather than dildil tuyo and dilis in the Philippines. Ahhh.. the realities of the economic diaspora that led the mom of Jessica Sanchez to the West Coast of the USA.
Who’s Gonna Earn What?
Yup, BSP will earn from the transaction but Filipinos wouldn’t. The value of their savings accounts will not increase. Their assets and portfolios will not increase. Their net worth will not increase. The GDP per capita, much less the Gini coefficient wll not change. Our international reserves have risen due to the OFW remittances and this irresponsible plunderous lending needs to stop – not at OFW’s expense, or taxpayer’s burden for that matter.
The economies in the EuroZone will not be helped by additional lending. They are on a tailspin because of wasteful public spending. Lending more money is throwing good money after bad. The taxpayers of the Eurozone economies are highly burdened by huge government bureaucracies with fat retirement pension plans, burdensome regulations, and exorbitant tax rates.
BSP’s earning from the misery of European taxpayers does not really help at all – it’s DISGUSTING.
Lending $1 Billion is lending the European taxpayers a longer rope to hang around their neck – and ours, too. 
The Filipino public should distinguish between personal austerity and government austerity… oopps.. austerity does not exist in the Pinoy vocabulary. Panay yabang, kahit baon sa utang. We just had a budget deficit, public debt has just increased – and we want to lend our dollar reserves to the IMF so it can take the skin off the back of European taxpayers? Karma’s a bitch – that lending will also hurt Filipinos. Specially when such money can be translated to VAT tax reductions for Filipinos – or outright repeal of the VAT so that taxpayers will be more liquid to face the economic challenges. Lending by the BSP does not improve the life of Filipinos inasmuch as lending by the pawnshop takes one out of chronic poverty.
Should Filipino Taxpayers Enable/Subsidize Irresponsible Government Policies – At Home and Abroad?
Lending more money to feed the voracious tax wasting appetites of Euro bureaucracies does not help taxpayers at all – whether Filipino or Europeans.
Subsidizing exorbitant tax rates, huge bureaucracies,and tons of regulations will not avert financial difficulty or gloom for countries that pursue unsustainable welfare state policies. The gloom will be on government vested interests and government fat cats who have to go if the leviathan Euro agencies are downsized.
You think France has a high 66% tax? Wait till the French raise it to 75% 
prompting Will Smith to howl. On top of that look at what the Italians have come up – on top of the mafia, sex orgies by Berlusconni, Ferraris, the Foreign Legion Italian politicians have constructed a very impressive maze of red tape, intervention, and regulation. From the Wall Street Journal, here is just a sampling of the idiotic rules that paralyze job creators and entrepreneurs:
Once you hire employee 11, you must submit an annual self-assessment to the national authorities outlining every possible health and safety hazard to which your employees might be subject. These include work-related stress and stress caused by age, gender and racial differences. …Once you hire your 16th employee, national unions can set up shop, and workers may elect their own separate representatives. As your company grows, so does the number of required employee representatives, each of whom is entitled to eight hours of paid leave monthly to fulfill union or works-council duties. …Hire No. 16 also means that your next recruit must qualify as disabled. By the time your firm hires its 51st worker, 7% of the payroll must be handicapped in some way, or else your company owes fees in kind. …Once you hire your 101st employee, you must submit a report every two years on the gender-dynamics within the company. This must include a tabulation of the men and women employed in each production unit, their functions and level within the company, details of their compensation and benefits, and dates and reasons for recruitments, promotions and transfers, as well as the estimated revenue impact. …All of these protections and assurances, along with the bureaucracies that oversee them, subtract 47.6% from the average Italian wage, according to the OECD. …which may explain the temptation to stay small and keep as much of your business as possible off the books. This gray- and black-market accounts for more than a quarter of the Italian economy. It also helps account for unemployment at a 12-year high of 10%, and GDP forecast to contract 1.3% this year. 
As pointed out in the Cato Blog
You won’t be surprised to learn that the unelected prime minister of Italy, Mr. Monti, isn’t really trying to fix any of this nonsense and instead is agitating for more bailouts from taxpayers in countries that aren’t quite as corrupt and strangled by red tape.
Monti also is a big supporter of eurobonds, whichs make a lot of sense if you’re the type of person who likes co-signing loans for your unemployed alcoholic cousin with a gambling addiction.
Eurobonds, BSP bonds – same tune. 
And that includes OFWs co-signing loans for unemployed philandering spouses or relatives with a mahjong or shabu addiction.
Italy’s got regulation, so does the Philippines – check out the asinine Retail “Liberalization” Act of 2000
Section 1. Prequalification Requirements. – Before a foreign retailer is allowed to engage in the retail trade business or invest in an existing retail store in the Philippines, it must possess all of the following qualifications:
(a) A minimum of Two hundred million US dollars (US$200,000,000.00) net worth in its parent corporation for Categories B and C, and Fifty million US dollars (US$50,000,000.00) net worth in its parent corporation for Category D;
(b) Five (5) retailing branches or franchises in operation anywhere around the world unless such retailer has at least one (1) store capitalized at a minimum of Twenty-five million US dollars (US$25,000,000.00):
(c) Five (5)-year track record in retailing; and
For purposes of determining compliance with the above requirements, the net worth, track record and existence of branches and franchises of the parent company, its branches and subsidiaries and of its affiliate companies, as well as their predecessors, which substantially owns, controls or administers the operations of the applicant shall be considered.
(d) Only nationals from, or juridical entities formed or incorporated in countries which allow the entry of Filipino retailers shall be allowed to engage in retail trade in the Philippines.
Preventing spillover to other parts of the world is not achieved by lending a billion dollars so that government agencies can continue to waste good money after bad. Countries with prudent fiscal policies – small governments, minimal regulations, small tax rates will have prosperous citizens that are able to weather an economic storm – in fact even thrive in it via savings and purchases of precious minerals.
The Philippines’ export performance need not be limited to Europe. Sending thousands of OFWs to Europe isn’t really a good solution either – not when we restrict the entry of foreign investments which are foreign majority owned – (read – higher than 40% up to 100%).
To Shield or To Compete?
To “shield” the OFWs – let’s not create OFWs in the first place. Make high paying jobs available at home – and at par overseas. Let’s stop breaking families apart so that there is lesser reason for the DSWD to come up with subsidy scams and what not. It’s still fresh you know – the CCT subsidy is racked with fraud, is ineffective and despite huge increases – self-rated poverty, hunger, and joblessness have increased. Who are we really shielding when we keep the prices of commodities high – electricity, gas, telecom, internet, consumer goods? Are Filipino consumers LESS IMPORTANT than Filipino businesses? Why should Filipino consumers be penalized for the inability of Filipino businesses to innovate and be more cost-effective? Should Filipinos be perpetually condemned to watch the telenovelas and the douchebags that proliferate in the noontime shows of ABS-CBN and GMA7? Should Filipinos keep on protecting the rolling brownouts of MERALCO? If we shell out more money for electricity, water, gas – we have less money for health, education, investments and savings. Kinda convenient for the government to come in and offer “free health services”, “free condoms”, “free tuition”, “free education” and the whole buffet of “free lunch” – yup, gobble up the pork barrel – then proclaim that the plunder drives economic growth.
Shielding OFWs from global uncertainty is best done by not having OFWs in the first place. How exactly? By removing Sec 10 and 11, Article 12 of the Philippine constitution. Th 60/40 provision restrict the entry of foreign companies that can provide jobs to Filipino parents, husbands, wives, aunts, cousins, friends, relatives – and not just to those who know to pander and kiss the ass of the oligarchy.
Fiscal austerity – downsizing government, eliminating regulations that skew the market will do more to stabilize the economy – take it from Sweden and Germany’s austerity or Iceland – who jailed the bankers, removed the entire government, and rewrote the constitution – pecafully.
Businesses should be allowed to thrive because they provide a value to consumers – not because the owners happen to be Filipinos. The Filipino First policy is a relic of a bygone era. The country needs protectionism like BS Aquino or Kris needs genital warts.
BSP investments are useless to Filipino taxpayers. Not when they have to toil overseas amidst gunfire, prostitution, and servitude. I am more concerned about the personal income of Filipinos and keeping Filipino families together than the bottom line of Henry Sy, Pangilinan, Ayala, Cojuangco, Lopez. BSP has done nothing but cause inflation rendering assets of pensioners to decrease – it’s another tax in disguise.
Sure the BSP may have “shielded” the Philippines from the busts of the global economy – but it too has shielded the Philippines the economy from the booms of the global economy.
Should the BSP Have Been Created in the First Place?
The BSP frequently cites the law which created it as having vested it with authority to invest taxpayers property in foreign capital markets.
Having the authority, does not necessarily mean such authority will be exercised. Restraint should be the rule – not the exception. Investment is the role of the private sector. Investing public property in financial instruments only benefits the vested interests – not the Filipino taxpayers.
This matter puts into question into whether the law creating the BSP needs to be amended and the BSP no longer allowed to move funds around. Wealth creation should be reclaimed or claimed by the Filipinos for themselves – through Congress , their votes, their consumption behavior – the government has no business playing around with public funds.
The $1 billion commitment of the BSP to the FTP is a form of economic plunder. It uses public money to sustain tax-wasting policies that impose a burden on European taxpayers – and Filipino taxpayers, too.
The bullshit about the consultation between BSP, DOF, Congress is a ruse. The core of the matter is that Filipino taxpayers should not bear the burden of having the countries dollar reserves subsidize Europe’s Self-Inflicted Decline: French Taxing, Italian Regulating, Greek Mooching, and IMF Economic Illiteracy.
Is the BSP Still Needed?
Singson’s bravado in using the name of Filipino taxpayers, to trade in financial markets – on top of causing inflation and booms and bubbles puts the question of whether the BSP is needed. 
Eliminating the BSP – and tying the Philippine peso to the gold standard will be opposed by fears of potential deflationary effects and more exchange-rate volatility on the short term. On the long-term however as lesser inflation and booms and bubbles are caused by BSP intervention in financial market – the result would be more long-term stability for the global economic system – and Filipino taxpayers prosperity.
Considering that the Philippines has sizeable gold deposits 
– it will be more prudent to abolish the BSP – and peg the peso to the Gold Standard.
Yes – you heard me. Abolish government monopoly of monetary markets – abolish the Central Bank of the Philippines – Free the monetary market from the clutches of the BSP and the IMF.
About the Author
BongV has written 389 stories on this site.
BongV is the webmaster of Antipinoy.com.
