OFW’s remittances propelled up our GDP no question about that. Savings whether in stocks, UITF’s or mutual funds are on a higher note because of awashed OFW cash…Hooray! But beware skilled labor supply in our country is fast diminishing, middle east will gulp up our labor resources till Y2010, which means that production facilities in our country will be lacking of manpower by then. The country should not depend on sheer remittances, we should have a product of our own, a technology that other country might want to use. Haven’t we notice the cycle of supply and demand, we supply other country with talents and they supply us with products/technology, we end up paying more.

[...] Money Smarts: Economy on a roll [...]

GDP at 6.9!!! woohoo!!! even stronger than GNP’s 6.2, which means economic development is happening here in our country. stocks end higher due to positive investor sentiments.
I think we have the economic momentum, we just have to sustain it. And I hope politics will stay away from our road to economic success. Congrats to all of us, and to the economic team of the gov’t who work really hard despite their meager income as govt employees.

[...] than in economic activity that will make a serious dent on the living standards of the public. Money Smarts points to where the growth is taking place: The gross national accounts capture benefits from [...]

i agree with randy. our country is a rot. its too early to say we pass the test. its really our filipino attitudes that is killing our country. with all the corrupt politicians, justices, law officials, do we think we can sustained this progress? i dont think so! ed from new york

spreading the news, here are the most common responses i got from fellow ofw’s here in singapore. (in no particular order)
1. ows? talaga ha?
2. gobyerno lang naman nakikinabang.
3. pakulo/publicity stunt lang ni gma yan.
4. ganun/mababa pa rin naman sweldo sa atin.
5. kumpara mo naman sa development dito sa singapore (or iba pang bansa).
6. pataas pa rin ng pataas naman bilihin sa atin.
7. election kasi.
8. babalik din sa dati yan hintayin mo lang.
9. dahil lang sa remittances natin yan.
10. pano magimprove e wala nga gusto maginvest sa atin e.
11. ahhh.. (tapos no reaction or change topic).

as you can see the best reaction i got were either of disbelief (1) or no reaction at all (11). have we really become so pessimistic and indifferent?

@salve: “I wonder what ‘tobacco’ is doing in that list.”

- hey, that’s as far as what some yuppies like me can get for the slack that’s actually left for me.

@randy: “Haven’t we notice the cycle of supply and demand, we supply other country with talents and they supply us with products/technology, we end up paying more.”

- establishing a base of distinct technology or production in this country happens to be far costlier than importing existing ones. even if it does push through, the cost of maintaining operations can’t be supported without pricing goods or service higher than existing ones available.

korea and japan took decades in its shot at creating its own products so it should not happen sometime soon here as well considering that competition has already gone global already.

ed,

I must agree it’s too early to say we pass the test. But then again what we need is to sustain the momentum. as the song goes, “if you wanna make the world a better place then look at yourself and make that change”

mikoy,

I was hoping OFWs there are enthusiastic about the growth here bec they can go home on a better economy. I can’t blame them bec these are macro numbers and will not directly and immediately be felt. That is why it will not immediately translate to better wages. And I hope you can explain to them that it is not like election numbers where you can do dagdag-bawas. There is basis for the 6.9 and it was well surveyed and estimated using the best statistical tool possible. It is happening, it is real, it is just that it will not immediately translate to better lives, but we are going there.

qwerty,

it is a matter of comparative advantage. If services is the country’s comparative advantage then so be it. But I think the problem is that we are having too many number 1 priorities. What do this mean? well we prioritize everything, like tourism (also medical tourism), mining, etc. I think maybe we are just multi-tasking? hehe. Well I do hope we can sustain this growth so the the whole world may know that we are destined to greatness.

ed,
sorry but I dont believe our country is rotten, but yes youre right it is too early for victory party, if ever we see it in our lifetime.

qwerty,
Nobody thought that Sony will make it big before and that KIA cars are inferior. But hey arent these brands a familliar sight in our country?

PBF,
As I see it youre an ever optimist Good for the Country. And as Salve points it out, investments are seen to be pouring in, I cant wait for these investment to materialize. It is good to have an actual operations training for our newly Grads before they too will be pirated by other Country! ask the Petrochemical and Power Industry managements.

@randy: true and that just goes to prove my point there. japan and korea took years, even decades to establish something that they can definitely call their own.

consider too that the said countries didn’t have to worry about global competition then as much as they currently have to if they were to begin that nation-building process they undertook today.

@pbf: if by sustaining growth you referred to policy makers setting great priority on establishing true filipino-based manufacturing and/or production firms then that would certainly be difficult to achieve given that those holding office are given a few years to implement policies when implementation of such could take more than the amount of time of their tenure.

don’t get me wrong though. i’d certainly be one happy Juan if such thing happens in the near future but with the pressure mounted on elected officials to serve the interests not only of businesses but mostly those who live below the poverty line, it won’t be surprising if they fall short on this aspect of national growth. after all, those people are the ones who would guarantee they stay in office, (at least theoretically.)

Hello,

First, thanks for inserting my blog into your blogroll.

Having said that, I have two comments.

First @mikoy, a lot of the negative comments has to do with the fact that GDP is a bit too deep for ordinary OFW’s to understand. Also, corruption and bad governance is just a reality and no explanation is needed.

Second, I’d like to comment on this one that you wrote: “Government’s spending grew 13.3 percent”.

GDP is comprised of Consumption, Investment, Government and Net Exports. (For an overview of GDP and macroeconomics, please visit my site).

Now, increased government spending does not increase GDP, it just increases the share of GDP (resources) commanded by the public sector (assuming full employment).

qwerty,

Great people have the initiatives of creating new things, if we will not change now then when? are we forever be copycats? no wonder we are bragging of attaining 6.9 GDP while everyone else is passing us by. Hunger in India? That’s history. Economic turmoil in Vietnam before? whew we’ll be eating dust 5 yrs. from now. Time will come, having no identity of our own thru product/technology, we will be forced to buy from them. Hmmm reminds me of that three same numbers of the beast, especially now that Japan had developed a microchip that needs no battery and to be implanted in forehead or hand where electricity flow is high. *Anyway, case is closed, coz We will be ‘Happy Juans if such things happen’ right? (*referring on our discussions and not on the beast)

reyna elena,

You seemed to know a lot about Economics, may I know your Blog? One thing though, I think Salve had explained clearly about GDP and its Ingredients. The context of her explanation was deleted in your quote.

Peace be with you both!

@qwerty:

I do have a blog where from time to time, I touch business topics like these ones:

1.) http://reynaelena.com/2007/05/26/is-the-peso-really-gaining-some-strength/ (Is the peso really gaining some strength)

2.) http://reynaelena.com/2007/06/01/what-in-the-world-is-gdp/ (What in the world is GDP)

3.)http://reynaelena.com/2007/06/02/655/ (GDP Exercise: Business News Analysis)

Violent reactions are welcomed.

Oooppss! Sorry QWERTY! @ randy PALA! he he he!

and yes, I am one of those OFW’s who’s not jumping and singing tra-lala about this 6.9% GDP. not me. sorry.

reyna elena,

violent reactions indeed are there though amusing ones huh. I have already visited your blog and liked it also, entertaining and educational as well.

Salve,

I missed the bullrun of last years exchange but already gained 14% of my new investment courtesy of you and your informants (aka readers).

Thanks gals for creating these Blogs.

@reyna elena

Can you elaborate why are you not singing tralala on our growth GDP? Thanks.

BTW your site is informative and would be a great help for non-Econ Majors to understand the concept of Macroeconomy

@PBF
I think the lack of enthusiasm is not only restricted to ofw’s here in singapore. I think many share the same sentiments, even folks back home. believe me, i did my part explaining (in a very subtle way) that these numbers are facts, that the stock market is at an all time high etc. it’s futile really. most are more concerned over the low exchange rate (which is sad). i guess the benefits has to be more tangible than mere numbers.

as for me, im not overly enthusiastic as well but im appreciative of the good news. good news is good news.

@reyna elena

i’m sorry but i think it’s an understatement to say that these are ordinary ofw’s im talking about. these ofw’s are mostly engineers at the top of their game and barely 30. most of them graduated from prestigious universities even. having known most of these guys for years i can say that they at least have a basic understanding what the gdp is. problem is, most just simply stopped caring and given up about all that.

And indeed the market’s on a roll, another record high of 3,622.94! And my mutual fund shares just quintupled to P 1.5M plus today, yeah baby yeah! I’ve been tracking my fund’s progress lately and here’s my scorecard:

P 300k investment in - Nov 24, 1998
doubled in - Sep 6, 2004
tripled in - Apr 6, 2006
P 1M in - May 5, 2006
quadrupled in - Dec 29, 2006
quintupled in - Jun 4, 2007

Congrats hachiko! You’re lucky that you started early with your mutual fund. Is your portfolio (300k) the sum of all your mutual funds or you just put it in one basket? and may we know what is your mutual fund?

Thanks PBF. P 300k bought 106,590 Philequity shares last 1998, which I earned from appearing on TV during my teens. I felt the need to invest it if you don’t wanna end up in the news like this:

http://showbizandstyle.inquirer.net/breakingnews/breakingnews/view_article.php?article_id=69631

Of course I have more follow-up investments in mutual funds, real estate, etc. from my current career, which I won’t disclose anymore. So that P 1.5M’s just the tip of the icebox and comes w/ a very interesting story…

It took a while to double, 6 yrs, given the slow economy around 2003. But it’s grown terribly fast ever since. Okay, Gloria’s right, we’re on a roll…

wow…i hope my mutual funds will go all the way like hachiko’s. way to go dude!

hi, there’s a quicker way to quintiple your money! Take 300,000 one-peso coins, melt them down and sell the copper and nickel. Each peso coin now has P 5 in metal since metal prices are also on a roll! hehehe. But now don’t ask me whether it’s legal But then again BSP is really nuts not using a cheaper alloy for our coins.

@hachiko

of course it’s illegal! It was on the news early this year. they didn’t melt the coin though. it’s costly! think of the amount of heat you will need to melt the coins. they actually pound it to thin sheets, then export it. Of course they were caught. I think the BSP cannot easily change the component of the coin because the quality will suffer, and also it will be prone to counterfeit. remember the fake 5 and 10 peso coins victimizing commuters?

Economy is an a roll…the second time around! woohoo (ala homer) 7.5% GDP, 8.3% GNP. How’s that? Q1 was also revised, upward! I was expecting they will revise the Q1 data downward to near 6.7. but surprise surprise! (supplies if you’re chinese). the economy actually grew by 7.1% last quarter. Now, for the Q3 I don’t expect much growth. Nothing’s happening during the Q3, and also the dry spell will take its toll on Q3, but I expect agri to bounce back on Q4. It’s time to go bargain hunting on stocks! is it still down due to subprime jitters? tsk tsk. now investors will realize fundamentals is still better than investors’ EQ.

[...] fact, while GDP is the most popular thermometer for economic growth as I wrote in a previous post, it doesn’t bother most hard-nosed businessmen who have lived through wars to tell their tales. [...]