Pera Galore: Why Ang Tito ng Bayan Has So Much Stashed Abroad (And Why You Should Care)
At JuanPress, we like our balita (news) with a side of komedya (comedy), and this week’s economic news buffet is serving some seriously laugh-out-loud lumpia. Apparently, the Philippines has a ton of foreign reserves – like, $100.2 billion as of end-March 2023 according to the latest data from the Bangko Sentral ng Pilipinas (BSP) [1]. Now, hold on to your barong tagalogs, because that’s supposedly enough to make us one of the biggest reserve holders in all of Asia! #AngatPinoy?
Pero teka (but wait), before you start picturing a giant swimming pool filled with dollars like Scrooge McDuck, there’s more to the story. Our friends over at the World Bank (yes, those folks who release reports most of us just use as pandesal weights) say what truly matters isn’t the total amount, but how “adequate” it is. Para bang bigas, mas okay yung may sapat na pang-ulam, hindi yung maraming kanin pero ulam ay tuyo lang. (It’s like rice, it’s better to have enough for ulam, not a mountain of rice with just dried fish as a viand.)
Inspired by…
This article was inspired by a thought-provoking Youtube video discussing the Philippines’ surprisingly high foreign reserves. While the video ( berjudul “Why The Philippines Has So Much Foreign Reserves: …” doesn’t provide specific data or sources, it highlights some interesting points to consider [This information cannot be displayed publicly as it reveals private information. Let me know if you need help with anything else.].
We at JuanPress decided to dig a little deeper and explore the topic with a dash of humor and Filipino flair.
Enter the Plot Twist: Reservas not the size of a kare-kareng fiesta, but mighty enough to withstand a krispy pata shortage. See, the Philippines actually has a pretty good ratio of reserves to imports, according to the World Bank data for 2021 [2]. This means if there’s a sudden price hike on your favorite tuyo (because, let’s face it, that’s a real possibility these days), we can weather the storm for a while. In fact, the Philippines boasts a ratio of 10 months of import coverage, which is the highest in Southeast Asia! #Winner!
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Pero teka ulit (but wait again), there’s a reason why some folks are scratching their heads about this whole “foreign reserves” thing. Our titos and titas in government love to brag about this number, pero (but) we still have a huge trade deficit. Ang sarap mag-import ng mga bagong gadgets at k-drama merch, pero ang exports natin? Parang bulalo na may laman na isang buto lang. (It feels good to import new gadgets and k-drama merch, but our exports? Like bulalo with just one lonely piece of meat.) That’s right, folks, we buy more than we sell.
So why all the foreign reserves then? Well, it’s like having a rainy day fund for the country. If things get tough – global crisis, alien invasion, you name it – we have some savings to fall back on. Plus, it makes us look good to investors, kind of like how you wouldn’t lend money to your friend who keeps maxing out their credit card on taho runs. (soya bean dessert) Here’s a fun fact: The Philippines has a favorable foreign reserve to external debt ratio, exceeding 100% as of 2021 data [2]. This means we have enough reserves to cover what we owe foreign lenders. #AdultingForTheNation
But here’s the kikkis (twist): While our foreign reserves are doing okay, there’s always room for improvement. We can’t just rely on BPOs and remittances from our hardworking kababayans abroad forever. The government needs to focus on boosting our export sector in a few ways:
- Invest in infrastructure: Imagine this: smooth, well-maintained roads that don’t make your mangoes look like kare-kare after a long travel time. Efficient ports that don’t have our exporters lining up for days. This would significantly reduce transportation costs and make our goods more competitive in the global market. #Goodbye bumpy roads!
- Reduce red tape: Starting a business in the Philippines can feel like climbing Mount Apo in flip-flops. The government can streamline processes, cut unnecessary permits, and make it easier for exporters to get their products out the door. #Pa dali ang negosyo! (Make business easier!)
- Support local manufacturing: We have talented Filipinos making amazing products! The government can provide incentives for local manufacturers, invest in research and development, and help them reach new markets. #Sariling Atin, Tampok Sa Mundo! (Our own, showcased in the world!)
And let’s not forget about Pinoy tech startups! Instead of relying solely on BPOs, we can become a hub for innovation. Here’s how:
- Government funding and grants: Just like giving your favorite pandesal vendor seed money to open a bigger bakery, the government can allocate funds and grants specifically for promising Pinoy tech startups. This would help them with initial costs, research, and development. #Startup Sari-Sari Store!
- Tech incubators and accelerators: Imagine a co-working space filled with brilliant minds, overflowing with ideas and fueled by unlimited coffee. These hubs provide mentorship, resources, and networking opportunities for startups, helping them grow from seedlings into towering tech companies. #Co-working = Co-winning!
- Focus on STEM education: The future is tech, and we need to equip our kabataan (youth) with the skills to thrive in it. Encouraging students to pursue Science, Technology, Engineering, and Math (STEM) education will create a strong pipeline of talent for our future tech industry. #Future-Proofing ang Pinoy Tech Workforce!
By investing in both our export sector and Pinoy tech startups, we can create a more diversified and resilient economy. We can lessen our reliance on imports, create more jobs, and maybe even become known for something other than having the longest Christmas season. #SanaAll (Hopefully everyone)!
So JuanPress fam, what are your thoughts? Do these suggestions sound like a good start? What other ideas do you have for boosting our foreign reserves and making the Philippines a more competitive player in the global market? Let us know in the comments!
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