Juan versus Fitch,
Standard and Poor

Recently, our government was elated over the outlook on the Philippines by international agencies such as Fitch and Standard and Poor. Their revised "positive outlook" of our government's fiscal position has been heralded as a vindication of the government's programs and policies, and cited to argue that the economy is getting stronger. We can understand why the administration is feeling vindicated. The exchange rate of the peso to the dollar has been quite remarkable, and it is not always that we receive positive assessments from foreign financial institutions.

But what is the assessment of Juan de la Cruz, who views everything form the ground, where he ekes out a living, day in and day out?

First, let it not be forgotten that these ratings are "credit ratings", that is, they are assessments made by our creditors, in relation to the level of confidence that they have on us as borrowers. In other words, from their point of view, it is all about their chances of recovering their exposure to us, and nothing to do with whether there is enough food on Juan's table, or whether he is able to go to the hospital when he is sick.

Second, this positive or "stable credit rating" has been at the expense of the lifeblood of the people. It does not speak of government's efficiency in managing the economy, but simply means that government has more cash, or more money, because it has sucked more blood from the people by means of the E-VAT or R-VAT, now running at 12 percent. Of course, all that Fitch and Standard and Poor care for is whether the Philippine government is able to pay its dues. They do not care whether Juan de la Cruz survives. They don't go to the slum areas, the coastal regions, or the homes of Filipinos to find out how they are. They don't do survival ratings or life expectancy ratings. They only do credit ratings.

Third, the so-called "stronger peso" is only with respect to the exchange rate, that is, that unlike before where it takes fifty-six pesos to match one dollar, now it's only fifty-two, or fifty-one. But "exchange rate" is not what truly matters to Juan de la Cruz. Rather, it is purchasing power and earning capacity, or income level, not exchange rate.

For example, with all these government glee on the "economy getting stronger", does Juan's peso now give him what it used to? Juan's ten pesos last year or two can bring him back and forth, that is, two trips, within a ten-kilometer radius, by way of public jeepney. Today, his ten peso can only bring him one way. Good if, despite the disempowerment of the peso, he at least could have more of it. But that is not happening. We have lost count the number of times the prices of fuel and basic goods and services have increased, but cannot count how many times his salary has been raised.

What is worse is that the increased cash in government as a result of E-VAT or R-VAT for which we are given a positive credit rating has only increased the amount of money that thieves in government can steal. While Congress has increased the VAT, it has not voluntarily decreased its privileges or pork barrel. The adage "no pain no gain" does not apply to government, because to it, it is "to people the pain, to politicians the gain". For all that General Garcia stole from government in the Armed Forces, he only has two years of "hard labor", which invariably means being confined to airconditioned quarters.

And what of the fertilizer scam, where we see no effort by government to manhunt Joc-joc Bolante? And how about the road user's tax, the Macapagal highway (the most expensive highway in the world)? And how about the entire Comelec top brass, what with their billions of waste of government funds, the gross overpricing in the computer scam? Why don't we hear our President and her congressmen shouting to the top heavens for the removal, resignation, or impeachment of these commissioners? Are they kindred spirits?

Over these issues and matters, our rating remains "stable", because thievery, "commissioning", under-the-table deals, kickbacking, stealing, continue to be stable in government.

All told, it is not really Fitch, Standard or Poor that government must listen to. It is Juan de la Cruz. Because while Fitch, Standard and Poor are singing, Juan de la Cruz is crying.

And now the Constitution is to be blamed? And we must change it? By people's initiative? Fantastic.

And so the grand fiesta of fooling the people goes on.*