Philippine Economy Forever Tied to U.S. Economy Written by Ignatius Oyama

It’s no secret that the Philippines hasn’t given up the title of being “little brown Americans.” But it goes beyond mere cultural wannabe-ism. It’s one thing to watch American TV shows regularly and adopt the American twang when we speak English; it’s another thing to be afraid to get the flu when the U.S. sneezes, or having to adjust the dollar-peso rate depending on the state of the American economy.

So when news came out that the Central Bank of the Philippines will “remain vigilant" on inflationary variables while it keeps watch over the U.S. Federal Reserve’s decision to curtail its growth forecast, it was hardly surprising. The Philippine peso has hovered over just a few pesos over 40 to the dollar for a couple of years now because of the troubled dollar.

Consider how the decision of the Central Bank’s Monetary Board raise banks’ reserve requirement to 20% from 19% may reduce excess liquidity in the financial system by about P38 billion. These are the vagaries of the economy that affects not just the banks but the whole population.

We are a small country with a weak economy that doesn’t look to free itself from dependence to the stagnant but seemingly perpetually strong U.S. state of finance. But if we have to lean on a bigger entity it might as well be the United States of America with whom we have maintained a generally friendly relationship since the U.S. gave us our independence more than 60 years ago.

All that talk about the American empire on the throes of dying is a lot of nonsense. Despite its adventurism in foreign lands and the bland state of its economy, there is no stronger country more stable overall than the United States. There is something to gain from this wannabe-ism after all.

Faux forecasts and irreverence on matters as varied as finance, sports, music, and many more at Y101 Always First.