Wires are hot with news of the economy’s stunning performance in the first quarter. It’s like Arroyo got her Christmas gift early. At 6.9 percent, this is the country’s biggest year-on-year quarterly growth in the last 17 years. Only Vietnam with 7.7 percent and China with its 11.1 percent GDP had higher growth than the Philippines for the period.

Here’s the technical definition of GDP from Investopedia.com: The monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

For those who don’t care about the technical definition, just put a peso sign on every finished product and every service sold within the country for a certain period. Growth from quarter to quarter, year to year is the GDP growth rate. That’s about as simple as I can get. Economists use the GDP figure to measure economic growth.

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Here’s a public MoneySmarts confession. I have a fully paid educational plan with College Assurance Plans, and it’s the open-ended type. Yeah, silly me. Even before CAP officially admitted to its problems, I had heard of the dangers. Some reporter friends who were covering Congress at that time had obtained documents that already indicated that the country’s largest pre-need company was in trouble. And yet I still paid every centavo under the plan.

I still remember the day I went to CAP’s Makati office to get the certificate that I thought would get my child into the best schools in the country. As I was waiting for my number to be called, I sat next to a family that opted to get their benefits way ahead of schedule. The father, obviously an overseas Filipino worker, said he knew he would get only around 60 percent or thereabouts of the maturity amount. He didn’t exactly say it, but I think he also heard the rumors.

I guess he got a better deal.
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Filipinos love houses. It’s no secret that the ubiquitous Filipino seaman pays for a window this month, a wall next month, the backyard the following month…all in the name of a happy house for his family.

Today’s Money Myth Buster is really easy. The tip is: Buy your second house first.

The common tendency is to buy the dream house on the first try. That means buying the one that has the ideal living room, the kitchen that opens up to the east, the house with a bath for every bedroom and two or more guestrooms. Budgets are stretched to the limits. A few months later, amortizations and other hidden costs and series of unexpected expenses become totally agonizing. This tip says this is not a smart way to buy a house.

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Weekly “So What, Chocnut” entries didn’t work. First, those news articles are already history by the time Friday rolls along and second, it’s hard to consolidate one week of business stories you shouldn’t miss in one post.

So starting today, “So What, Chocnut” will be posted daily, in small snippets that busy MoneySmarts readers can easily digest. (I’ll try, I really will.) Here are the business headlines relevant to Personal Finance watchers:

In the Philippine Daily Inquirer today, Socioeconomic Planning Secretary Romulo Neri said the peso is now “uncomfortably strong” and urged the government to support the export sector. Did I miss something? Neri is urging the government? But he IS the government. He is the planning chief, for goodness’ sake! I have covered quite a few planning chiefs in my time. Neri is the only one with a multiple personality. Some things in this country are really strange, even for me.

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A grocery receipt is a thing of beauty. It shows all our angst and anguish, our hidden aspirations and frustrations :-). I certainly felt that way as I was thumbing through my two-feet-long grocery receipt and decided, then and there, to cross out items that I could live without.

A month later, sandwiched between tall shelves of SM Hypermarket, I was smiling smugly, feeling like a new person. Ha! I shaved off around P3,000 from my monthly food and toiletries budget. (Bow with a flourish).

If you or somebody you know is really hurting for cash NOW, why not consider trimming the fat off your budget. This is certainly not limited to grocery isles and will go a long way towards curbing that spending habit.

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Ahh… Divisoria. Where brave men dare not tread. But get a couple of mommies together, throw in some single ladies looking for a good bargain, and you are good to go.

A lot of people think going to flea markets saves quite a bundle of money. In December 2006, when the economy was scraping the bottom, Agence France-Presse reported that Filipinos flocked to places like Divisoria, Baclaran, Quiapo and other bargain shopping areas instead of glitzy shopping malls. For many, it was the worst Christmas in years.

And these are not just the masa you are talking about. There are a lot of Divisoria divas in the rich mommy club. Take Melanie Marquez-Lawyer and Tessa Prieto-Valdes, for example.

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My blog post last April on the janitor who made P7,000 a month in the early 90s and was able to save P24,000 a year struck a raw nerve with MoneySmarts readers. Many decided they needed to pick themselves up and do more of that thing we call frugality so they can save more. Others sent a flurry of comments agreeing to the principle. Some were piqued, believing it was some spin a rich person let loose on blogosphere.

I enjoyed the discussion on that entry. This story from the Agence France-Presse I read today made me think about that post. Read it and tell me what you think about the Bondi caveman:

Australia’s ‘Bondi caveman’ to keep his millionaire view

SYDNEY — A homeless hermit who enjoys a million-dollar view from his camp perched on the cliffs overlooking Sydney’s Bondi Beach was granted a reprieve Tuesday when the local council dropped plans to evict him.
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When our emotions run wild during shopping, our wallets take the hit. I have heard people I interview say time and time again that the most foolish purchases they made were done at the spur of the moment. Most, if not all of them, turned out to be very emotional decisions.

While I was attending a time-share or vacation-share marketing presentation for the first time, my jaw dropped when everyone stopped what they were saying to clap furiously at some couple’s decision to “invest” in the product.

At that time, it was very disconcerting and irritating to me, as I was furiously trying to figure out what the product was all about and what it would cost. Turned out it was a common strategy to heighten emotions and pressure others to do the same thing.
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Accidents happen without warning. They may cripple physically, emotionally and financially. The best protection against them is defensive driving, but there’s one very big factor even the most conscientious driver cannot control — drivers of other cars on the road.

Most of us don’t think we will ever be in an accident; others are paranoid about them the way I am. We all know Philippine roads and drivers are notorious across the globe. My husband drives me around town but because of our decision not to buy another car to minimize maintenance expenses, there may be a need for me to give up my pampered status :-p and become the family driver in the coming months. Now, he’s the one worried about road accidents.

Fresh statistics from the National Statistical Coordination Board (NSCB), shows that last year there were an average of 41 road accidents per day, second highest in the last five years.

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America is spending its way to disaster. You can see the signs everywhere: Americans burning a hole in their pockets through their credit cards, big houses, big cars, small savings. I can’t help asking whether Filipinos, always enamored with what Uncle Sam is doing, are going in the same direction.

In Metro Manila, at least, I would say this is true. As one of MoneySmarts’ readers commented (I think it was tee), we are in a wanna, wanna, wanna mode. Let’s break the mold by curbing our spending habits. This week, MoneySmarts is all about tips on how to do this in our Money Myth Buster feature.

Tip number one: Learn how to multiply by 12.

What’s the monthly payment on the new X-trail? Or the plasma tv? The monthly payment on a G3 phone is only so-and-so… That’s not so bad…

Thinking of spending in terms of monthly payments is a sure way of falling right into the marketing trap. Some marketing guys are so smooth, they even divide the cost into days (It will only cost you P150 per day! Surely that’s not expensive?).

Bust out of that mentality by learning how to multiply by 12 – all the time. That simply means to annualize the cost of an item. And then ask yourself what that kind of money will mean to you.

I tried this tip with a couple I met over the weekend at a friend’s son’s pre-birthday swimming party. With three children in school, they are starting to worry about tuition fees. “It’s an annual headache,” they told me. The main breadwinner, the husband, has a stable income and commissions on top of that, sometimes amounting to P50,000 in one check. But they had credit card debts and they are always worried about money, they say.

The couple said their main problem was they love to dine out as a family. New Italian restaurant across the street has to be tried. Little burger joint should be tested. They spend more or less P2,000 per payday minimum. They didn’t say how much was the biggest bill they every paid on food.

I looked at them in admiration. Both husband and wife are loving parents. They are totally family-oriented. They are good people who are trying to do their best but are floundering. Two grand every two weeks didn’t seem like much in the face of a P50,000 single check for commissions.

I let them do the math. P2,000 per payday meant P4,000 per month meant P48,000 per year. Their eyes grow large. “That can be a huge chunk of their tuition fee!” wife says.

Marketing staff pepper malls these days selling all sorts of imaginable stuff on installment – from Black and Decker power tools to Magic Sing Karaoke to condominium units. They make it look affordable by using the monthly payment trick. Flip the technique back at them by always multiplying by 12.

Fair-goers check out Samsung’s 102 inch plasma TV. Photo: AFP