(Last week, I emailed Filipinos working all over the world to find out how the US global financial crunch is affecting one of the major sources of the country’s liquidity—the so called OFWs. Some are regular readers of MoneySmarts, while some are friends of another blogger Reyna Elena. They were kind enough to reply and a short version of their emails (in the interest of space) were included in a feature I wrote for the Philippine Daily Inquirer. I am publishing this week in installments the full version of their emails. I hope the series will help us understand how Filipinos all over the world are affected and are responding to the crisis.)
I have just recently quit my job as director of finance in one of the largest housing authorities in the United States with over 3,000 employees. I’ve been unemployed since July 2008; however, I have just accepted a job in Chicago as director for one of the largest development corporation dealing with housing tax credits, asset management and property investments. I expect to start very soon.
My parents, very religious, took the church’s “go and multiply” advice by heart and made parenting an algorithmic Fibonachi, that’s why there’s 11 of us in the family. We lived in the barrio and could not find opportunities in the Philippines because at that time, they’re all reserved for the rich, the powerful and the conios. So, I paddled my boat to the land of apples and honey. I’ve been working in the United States for over 21 years now.
Growing up in the Philippines, I really thought that we have perfected corruption. To my surprise, corrupt officials are populating Wall Street and beyond as well. They could literally bring down a world financial system! That worries the heck out of me because I can’t seem to believe that these crooks could actually shake the entire financial system and make our lives miserable. When I say “our”, I just don’t refer to Americans, rather, world citizens as well. For if America sneezes, the world catches cold.
Given that I worked in the financial, real estate, investment and asset management side, I had the privilege of understanding the complexity of what’s behind the current financial turmoil and so I could fully and truly appreciate its implication on me personally, my family and my fellow overseas Pinoy friends.
My 401-k (read: retirement) is now down 15 percent. Two weeks ago, I felt comfortable because my retirement money is with Wachovia, where it sits at the moment. Suddenly, Wachovia is in the news. It’s bad enough that I have increased my monthly remittance to the Philippines because of certain fixed expenses back home.
As you can see, Filipinos here in the States took a direct hit from the subprime crisis, from our retirement investments to our mortgage that can’t be refinanced, to our rising credit card interest. Loans are now difficult to find. Worse, applying for one is even more difficult. So, we’ve cut down on a lot of unnecessary expenses and travels.
Thing is, I don’t invest in Manila because I am not very familiar about the local investments procedures and I have had lousy experiences as a bank customer there. Since I don’t want to surrender the decision making to investment administrators in Manila, and they have not won my confidence as of yet, I continue to be on the sidelines.
However, I will never let those sick Wall Street people dictate my life. I am being prudent in all of my expenditures and wiser in spending money. My strategies are to stay put, cut down on expenses, find more extra income, and continue to be cute and happy. I was planning to go home and find a job in Manila. When all of these investment houses started tumbling down, I asked myself if it would be better for me to stay here. I’m still thinking. I can’t decide. Help me 
64 Responses to “A Pinoy in the US hit by the credit crisis”
Pages: « 13 … 12 11 10 9 8 [7] 6 5 4 3 2 … 1 » Show All
Pages: « 13 … 12 11 10 9 8 [7] 6 5 4 3 2 … 1 » Show All
October 12th, 2008 at 10:55 am
For the rest of my explanation, please visit this link: http://reynaelena.com/2008/10/12/in-defense-of-ofws-walang-ganyan-sa-states/
This is my response to pobreng_obrero:
Point number 2 is practically an economic, finance, taxes and social culture ignorance. He claims that: OFWs always tout themselves as “major income source for the Phlippines” but in reality they practically don’t pay taxes and most of their remittances go straight to CONSUMPTION instead of investments and savings.
First, let me put aside what’s true. What’s true is that OFW’s are one industry in itself, bigger than the $10 billion a year steel industry in the United States. We are now remitting over $16 billion glittering dollars. Second, let me teach you about some basic taxation. Our earnings are already taxed where we work. Depending on what country you work, the taxes could vary. From very small (Middle East) to very high (Europe or America’s). If in 2006, there’s about 10% of the population as OFW’s and based on my findings, OFW’s continues to grow, add that to the newly minted Filipinos because of the dual citizenship, how many of us do you think to fight against taxing our remittances? I could honestly tell you that Reyna Elena will be at the forefront of the fight. Pinupugutan na yong mga kasamahan ko, pati lalaki ni-re-rape, yong mga seaman, dinudukot, yong mga Pinoy sa Afganistan di ko alam kung natutulog taz ita-tax mo pa kami? If the Philippines will tax our remittances, what do you think we will do? Normal human reaction. We will limit or stop or withheld our remittances. Do you know the implication? It goes this way:
1. We send less or stop sending remittances to the Philippines.
2. People in the Philippines have less money to spend.
3. With less money to spend, people are not buying.
4. With people not buying, factories are not producing.
5. Factories are not producing because there are no orders.
6. When factories are not producing, it creates unemployment.
7. When you have unemployment, you have a restless society.
8. When you have a restless society, people kick out those in the government.
9. With less money, there is less savings and investments in banks.
10. With less money in banks, they can’t lend for infrastructures or projects.
11. If no lending on projects, more unemployment.
Do you see the connection? Am I clear with my explanation? Now, OFW remittances shielded the Philippines from the Asian Financial crises in 1987 and 1988. OFW remittances is what’s making our economy work. All these while we are separated from our loved ones back home. Why? Because people are spending. You want to tax our remittances? Think about your plan and sell it on Ayala Avenue. Let’s see who get’s stoned.
Point number 3 is the same as number 2. Blatant financial and economics ignorance. He claims that; No real homegrown products are being developed from those billions of dollars of so-called liquidity.
Let me start with the basics once again. Because we send money to the Philippines to the tune of $16 billion:
1. Banks have a lot of money or “liquidity”, therefore they can make loans.
2. Who do they loan to? Housing developers.
3. What do they do? Build condominiums.
4. When you build condominiums, you provide employment and create orders.
5. When you create orders, more employment is created because the factory will run.
6. When factories run, more employment.
7. Because everybody is productive, more taxes for the government. If they steal it, is another story.
8. With so many condominiums and houses, OFW who’s got the money buys up more.
9. The more OFW’s buys these condo’s the cycle of economic activity continues.
10. People are happy. The malls are busy. The restaurants are busy. The karaoke are blasting like crazy. Even prosties are happy.
Are you getting my point very clearly pobreng_obrero? That’s your liquidity at work all through the sacrifices of OFW’s.
October 11th, 2008 at 9:05 pm
@junebug,
my father was my greatest mentor and of course, a very good friend. he told me growing up in the barrio, given that there were no opportunities there, that I have to create the opportunity for myself. i thought he was making fun of me. i was actually a little bit annoyed at him at that time hehehe!
it’s really all up to us, the person. i’m no graduate of best school in the Philippines, i just have to do the best that i could. cry with tears but i never let misery dictate my journey.
i’m wayyyyy far from being successful hahaha but if dream and act on it, with a little bit of luck, your life will have glitters.
October 11th, 2008 at 9:00 pm
pobreng obrero wrote:
OFWs always tout themselves as “major income source for the Phlippines” but in reality they practically don’t pay taxes and most of their remittances go straight to CONSUMPTION instead of investments and savings.
In fairness to Pobreng Obrero, I’m just busy at the moment with my Chicago move, I’m glad Cat responded to your comments, but I will make an entry and I will explain to you why your statement is blatantly wrong Mr. Obrero. But I’ll give you the benefit of the doubt that you are just way too misinformed.
Next time, read, understand and ask questions. Ignorance could be very very expensive.
October 11th, 2008 at 4:14 pm
Response to the Ca t:
You hit the bullseye. Not too many Filipinos are aware of what really happened before and after the fall of Marcos, that is still happening now. We easily forget the pain and suffering brought by that Marcos era. I really hate those politicians that stash their loot to foreign countries and even send their families there to escape political upheavals. Its like a tele-novela in our political society. Our “masa” have the propensity to worship and adore celebrities and political personalities and even entrust to them the stewardship, hence the future of our nation. From Marcos to Cory, to Arroyo you’ll see the evolution of political dynasties that is now a form cancer in our society. When things go bad, these political families easily go abroad to cool down and come back when the political climate calms down. What irritates me most is that their children and relatives are even the most arrogant ones in the social circles. Just look at this Marcos grandson Borgy, he’s still untouchable in spite of all the troubles he got involved with at the Embassy bar. The Marcos family virtually raped and robbed our nation but they’re still around and even more powerful.
October 9th, 2008 at 11:05 pm
to reynal elena, your success only means that your a true filipino who made it good in the US. sometimes we get dissapointed and frustrated when things happen not the way we want it to be. but just follow your heart and it will take you to the happiness your aspiring for.
to bluepanjeet, i definitely agree with you.
reynal elena shouldnt feel bad at all. in fact i envy his achievement and status in the US. even an ordinary janitor in the US drives a car, how much more for reynal elena.
to probreng obrero, truthfully i admire your patriotism and idealism. unlke diablo, your honest enough to admit that our country needs to address rampant graft and corruption issues. people have their own reason why they leave our country. but as what you said, if we all have that burning flame in our heart to make our country better, then it is still the best place on earth to live.
pinoy at heart pa rin tayo!