(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”
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Pages: « 13 12 11 10 9 [8] 7 6 5 4 3 … 1 » Show All
October 14th, 2008 at 6:42 pm
I think ito_Pinoy’s vitriol towards OFWs is misdirected. From an economic perspective, income directed towards consumption is a more beneficial activity than taxation - particularly if the government has questionable ways of allocating resources towards true public goods. To be curt about it and rehash basic economics, consumption drives investment because investment is nothing more than an exchange between current consumption and (greater) future consumption. Moreover, the level of household/firm savings (and investment) are a matter of how income is allocated, not where income is derived. The stereotype of the OFW spending earnings without saving is an issue of financial education (or lack thereof) that is as pertinent to local households/firms as it is to OFWs.
I think his beef with OFWs is that he believes a double standard with respect to taxation exists between income by OFWs and individuals/firms based in the Philippines. This is a gross simplification and misrepresentation. As rightfully pointed out, OFWs already pay income taxes within their host countries. OFWs pay taxes with VAT, documentary stamps, capital gains and other transaction-based forms of taxation. OFWs contribute to government coffers through fees with the POEA, the DFA, embassies, and other agencies with whom they need to procure certain types of documentation/certification.
Concerning the issue of “sacrifice,” individuals are by nature, and by definition, utility maximizers. In the case of the teacher or nurse who decides to slug it out in the Philippines despite opportunities to earn more elsewhere, it is a case of psychic income and a value system which regards the utility of staying as greater than that of leaving. But this is certainly not for everyone, and from a coldly economic perspective, if adopted for areas which have limited impact on real, financial or human capital (e.g. entertainers, excess unskilled labor), a gross misallocation and underutilization of resources. (e.g. Our future economic competitiveness would not be crippled if all our entertainers went abroad as OFWs.) More personally, I would seriously question the nobility of knowingly subjecting one’s dependents to a significantly harder life in the presence of viable legal and moral alternatives working overseas.
October 14th, 2008 at 3:24 pm
@reyna elena,
at least you’ve explained to ito_pinoy that there’s a big difference between ignorance and sourgraping, vice intelligent analysis and objectiveness.
October 14th, 2008 at 2:59 am
Ito_Pinoy said:
“even an ordinary janitor in the US drives a car”
Don’t be fooled. This is a false perception. The janitor in the U.S. has a car which he can’t pay for…they have big houses (mortgaged) which some can’t pay for the interest…that is what the credit crisis in the U.S. is all about.
@ito_pinoy.
Yes, it’s true. That’s not a perception. Janitors, maids and the lowliest salaried employees. Cars in the US, (unless you live and work in the city full of public transport) is a necessity.
Next, the credit crisis in the US was because of some very lax lending process by fly-by-night mortgage operators who took opportunity of the housing boom. Then, Wall Street started shiting monies and funds to make more money by engaging in derivatives trading called “credit-default-swaps” which essentially are mortgage backed securities. Not of janitors who have big houses who can’t pay. There probably is an incident of that one, but who knows.
October 13th, 2008 at 11:57 pm
@Ito_Pinoy
huwag mong insultuhin yung mga nasa amerika at huwag mong lalahatin.
mukhang hindi ka pa nga nakakalabas ng pilipinas. sampung taon na ako sa amerika at nasa maintenance lang ako ng isang convalescent hospital. pero ang nakakain ko dito ay pareho lang ng kinakain ng mayayaman dyan sa pinas. ang kotse ko bayad na dahil binili ko ng cash, kahit second hand lang. gutom lang yan kaya makitid ang perception mo. siguro nakainom ka ng gatas na may melamine..he he he. well, hanggang perception ka na lang talaga dahil hindi ka nga makakuha ng US visa dahil hindi ka makapasa sa interview. hindi mo naranasan ang magsumikap at magkapagtrabaho sa amerika. kahit ano pang sabihin mo o credit crisis ang maranasan ng amerika, masarap pa rin ang buhay ng nakararami dito. tanungin mo na lang yung mga doctor dyan na bakit willing maging nurse lang dito. ewan ko kung bakit? tanong mo sa ulap. sorry ka na lang…if i were you stay nationalistic and patriotic. buti pa si ka roger, pinatunayan ang kanyang nationalism kahit kumakain lang ng kamote sa bundok. yun ang gayahin mo at huwag mong ihalintulad ang mga pilipinong gusto lang makatikim ng konting ginhawa sa katulad mo na na-stuck na dyan sa administrasyon ni GMA at hanggang blog na lang. mag file ka na rin ng impeachment against GMA para mas masaya..or suportahan mo yung susunod na kandidatura ni Erap…he he he he
October 12th, 2008 at 1:14 pm
“even an ordinary janitor in the US drives a car”
Don’t be fooled. This is a false perception. The janitor in the U.S. has a car which he can’t pay for…they have big houses (mortgaged) which some can’t pay for the interest…that is what the credit crisis in the U.S. is all about.