Whither Weather?

Chilean Weather

Weather is something we often ignore, often curse, often chat about when there is little else to yap about. 

I am definitely for weather. I like it.

Now I've been around this planet a bit, thanks to my banking job and the wanderlust of being a Myers Briggs personality profile INFJ, always looking around, always searching, settling for awhile, then moving on. Gemini with winged heels airlifting him to this country or that, this climate or that.

Europe is pretty boring. It has regular seasons, tepidly warm around the Mediterranean and very cold in the northern reaches. It is a little like my home state of Colorado in the US. Move south to Arizona and Texas and find the heat and snakes there, some of them even reptiles. Move north through Wyoming and Montana and arrive at that ice cube called Canada. A perfectly nice country with perfectly horrid weather.

I got frostbitten ears when I was a kid in Colorado, and I got tired of chipping the ice off my car's windshield in winter, never being of sufficient stature there to own a garage. So when I graduated from Viet Nam, I headed to Southern California, and I've been migrating warmward ever since.

The two most dramatic weatherworlds I inhabited along the way were Alaska and Chile, the former adjacent to the north pole and Russia's Siberia, the latter stretching from the heat of the Atacama Desert in the north to a pie-slice of Antarctica tipping at the South Pole, with the dramatic center being near the Straits of Magellan where the Pacific and the Atlantic meet in huge gusts of churning wind, defying man to stand upright. The wind there is rather like a combo of a good stiff drink and a left hook from Pacquiao.

Alaska was cool, best toured by raft through nowhere (Tatshenshini River) during the short two-months of summer, camping in front of glaciers grinding their way through solid rock and calving ice bergs with rumbling booms to match any cannon I ever fired during my deafening stint in Army artillery. Watching the northern lights dance their elegant shimmering sheets of reds and greens and yellows as if God were really a gigantic Walt Disney. Carrying guns to ward off bears and charging mooses. Listening to wolves wail through the night, right over that ridge there.

Guanacos

Chile and Torres del Paine National Park are a land locked in time. Winds and rugged glacier-carved mountains and animals that I'd swear are a cross between a camel and a gopher, called a guanaco. A mountain climbed only once, not because it is tall, but because it rests forever with its peak in a pack of icy clouds, making the top the slipperiest slope in the world. Oh, and because the owner of the property, the guy who climbed it once with a party of 40 clamping him onto the ice, won't let anyone else do it.

I should also mention Egypt here, too, in case you think I don't know heat. That's the most amazing place for touring temples and tombs. But I wouldn't want to live there. It is fit only for scarab beetles and whacko arabs who can glom onto a piece of land close to the Nile, the lifeline of Egypt, when they aren't busy rioting against one another. That's a place with more negative bad attitude than even the Philippines.

And my point, for there is one amongst this ramble, is that the Philippines is certifiably the number one weather spot on the planet. First of all, there is no snow. That gets us 85 of the required 100 points for certification.

Second of all, you can live in a bamboo hut with only a pair of shorts to your name, as about 40 million people do. You don't need a fireplace unless it is a dirty kitchen. You don't need an air conditioner unless you live in the city where the cement grabs the day's heat and rams it into your house until the wee hours of the morning.

Water is right uphill over there. Food sprouts from the land like weeds.

The clouds and sunsets are God's handiwork. There's no Disney here, we got Rembrandt.  Islands float in seas of silver and gray as if they were green dreams awaiting our visit. We can imagine that we, too, could find escape from nuclear North Korea and Philippine bloggers and other malcontents who infest our life with angst and anger. We could, if we wanted, settle on a deserted sandy beach and cop a snooze any time we wanted.

"Ha! You fool, JoeAm! You also get 20 typhoons a year!!!"

Yes, we do! And killer floods and earthquakes that rumble as if they were straight out of Independence Day, tossing tsunamis about as if they were some junior god diving jackknives into in the kiddie pool.

What do YOU want for weather? Rain 364 days a year like Seattle, or the monotony of Los Angeles that has the same brown grey mush overhead for most of the year?

I like pizzazz, myself.  The drama of a rainstorm pounding like cattle on the roof, or a wind that dearly tests the axiom that bamboo bends but does not break. Ours broke a few months ago when a mighty storm roared through. I like the dry period when everything shrinks up and stops growing and the dirt becomes almost rock. Then the rains come sweeping in and the plants blaze into life, glowing fresh, standing tall and rising several inches a day, changing the garden landscape from week to week, no digging required.

It is astounding to me that the Philippine flag contains no green. The green of this place puts Ireland to shame. Some of the snakes are green, and lizards. And birds! Emerald quail, to go with the blazing blue kingfishers and flashy yellow  orioles that zip through bringing squeals of delight from my son and, I confess, from me, too.

I own no jacket. I pitched all my business suits. I wear shorts and a t-shirt 95% of the time, donning long pants for trips to the mall or visiting someone else's place. I own no pajamas. Just some cotton shorts for sleeping. What my wife calls a "blanket" is really just a sheet, and I don't need that most nights. I have an umbrella, but it is parked, gathering no moss. I'm with the natives who believe rain is a minor inconvenience because, after all, you just dry out. There are no icy winds to turn you into a popsicle. 

Sunsets, sunrises, rainbows and seas that shine. Clouds that billow blazing white all the way to heaven. Clouds that rumble dark threats from the underworld as another storm pounds in. Lightning that gives us accidental brownouts to go with the intentional ones aimed at saving the Electric Company some expense. 

You know what you need to deal with the weather hereabouts? A roof, a pair of shorts and a candle.

Parsing Fitch

The critics of the Philippines ate another bite of hat the other day when the Fitch Rating Agency upgraded Philippine debt to investment grade. Discussion threads on the upgrade were again the habitat of the 100 percenters, broken down about 80/20, with 80% offering commendations and full credit to President Aquino, and 20% claiming all credit should flow to Gloria Arroyo.

Largely missing were the voices of reason that say, sure, Ms. Arroyo can claim some credit for things like VAT, but the rating would not be raised if it weren't for Mr. Aquino's good governance agenda and fiscal management. Furthermore, some aspects, like steady OFW inflows, belong to no one but OFW's.

Like, where's the ANALYSIS instead of the need to win arguments?

Well, Joe's got it.

He took apart the Fitch statement announcing the rating upgrade piece by piece. The full statement is provided after this commentary. Here are Joe's findings:

1. Fitch places the Philippines at the bottom of the investment-grade category of ratings. There is a long way to go to reach top. Key point: work is not done.
2. Cash flows compare well with other countries thanks to strong OFW inflows. Imports are expected to increase with net flows remaining healthy through 2014. Key point:  The ratings look SIDEWAYS at other countries and AHEAD at what might happen; the Philippines compares favorably, in the main, with other peer nations, and the future looks stable.
3. The economy is strongly driven by domestic demand. Key point: growth is not driven by manufacturing or exports or government infrastructure spending.
4. Improvements in fiscal management have made debt resilient to shocks. This is a combination of good GDP growth with good debt management. Key point: Fitch explicitly attributes the START of this to President Arroyo.  Obviously, President Aquino has built on the foundation.
5. The macro-economic condition is sound. Inflation is favorable to peer nations. Key point: BSP (the central bank) is doing good work.
6. Governance is still weak compared to peers.  Key point: President Aquino is explicitly credited with improvements, but the Philippines is still seen as having governance problems.
7. Family income and living conditions in the Philippines are below peers. Key point: Way below. Poverty is an economic risk.
8. Philippine tax revenues are weak compared to peers. Key point: It is hard to extract blood from a turnip. Or taxes from a bazillion poor people.
9. The Philippines can realize further ratings improvements by continuing to grow GDP while broadening the tax base. Ratings could go back down if governance deteriorates or financial integrity slips. Key point: Pause to appreciate the achievement. Then get back to work. Aquino's "collect more earned taxes" initiative is sound.
10. The ratings assume: (a) good governance continues, (b) economic growth remains a little better than 5% per year, and (c ) there are no unexpected shocks. Key point: Pray.

The Philippines is looking good. The current administration should be rightfully proud of this achievement. So should OFW's and those of us supporting the economy by spending our income as soon as it comes in. Like, about EVERYONE I know.

Those who offer up sniping criticisms to take away pride in the occasion are small of mind and heart. This is a very notable and worthy achievement. By the Philippines. Period.

Now, y'all kindly get out there and keep earning and spending. Obey the laws, pay your taxes, be kind to your neighbor, support your nation.

Hi'yup!

Fitch Statement: March 27 (Organized in outline form by the editor for clarity)

• Fitch Ratings upgraded the Philippines' Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'BBB-' from 'BB+'. The Long-Term Local-Currency IDR has been upgraded to 'BBB' from 'BBB-'. The Outlooks on both ratings are Stable.
• The agency has also upgraded the Country Ceiling to 'BBB' from 'BBB-' and the Short-Term Foreign-Currency IDR to 'F3' from 'B'.
• Key Rating Drivers . The upgrade of Philippines' sovereign ratings reflects the following factors:
• The Philippines' sovereign external balance sheet is considered strong relative to 'A' range peers, let alone 'BB' and 'BBB' category medians. A persistent current account surplus (CAS), underpinned by remittance inflows, has led to the emergence of a net external creditor position worth 12% of GDP by end-2012, up from 6% at end-2010. Remittance inflows were worth 8% of GDP in 2012 and proved resilient even through the shock of the global financial crisis. Fitch expects a rising import bill stemming from strong domestic demand to lead to a narrower CAS and to stabilise the net external creditor position at a strong level through to 2014.
• The Philippine economy has been resilient, expanding 6.6% in 2012 amid a weak global economic backdrop. Strong domestic demand drove this outturn. Fitch expects GDP growth of 5.5% in 2013. The Philippines has experienced stronger and less volatile growth than its 'BBB' peers over the past five years.
• Improvements in fiscal management begun under President Arroyo have made general government debt dynamics more resilient to shocks. Strong economic growth and moderate budget deficits have brought the general government (GG) debt/GDP ratio in line with the 'BBB' median. The sovereign has taken advantage of generally favourable funding conditions to lengthen the average maturity of GG debt to 10.7 years by end-2012 from 6.6 years at end-2008. The foreign currency share of GG debt has fallen to 47% from 53% over the same period.
• Favourable macroeconomic outturns have been supported in Fitch's view by a strong policy-making framework. Bangko Sentral ng Pilipinas' (BSP) inflation management track record and proactive use of macro-prudential measures to limit the potential emergence of macroeconomic and financial imbalances is supportive of the credit profile. Inflation has been in line with 'BBB' peers on average over the past five years.
• Governance standards, as measured in international indices such as the World Bank's framework, remain weaker than 'BBB' range norms but are not inconsistent with a 'BBB-' rating as a number of sovereigns in this rating category fare worse than the Philippines. Governance reform has been a centrepiece of the Aquino administration's policy efforts. Entrenching these reforms by 2016 is a policy priority of the government.
• The Philippines' average income is low (USD2,600 versus 'BBB' range median of USD10,300 in 2012), although this measure does not account directly for the significant support to living standards from remittance inflows. The country's level of human development (as measured in the United Nations Development Programme's index) is less of an outlier against 'BBB' range peers.
• The Philippines had a low fiscal revenue take of 18.3% of GDP in 2012, compared with a 'BBB' range median of 32.3%. This limits the fiscal scope to achieve the government's ambition of raising public investment. The recent introduction of a "sin tax", against stiff political opposition, will likely lead to some increment in revenues and underlines the administration's commitment to strengthening the revenue base.

• Rating Sensitivities.
• The main factors that could lead to a positive rating action, individually or collectively, are:
• Sustained strong GDP growth that narrows income and development differentials with 'BBB' range peers. An uplift in the investment rate that enhances growth prospects without the emergence of macroeconomic imbalances.
• Broadening of the fiscal revenue base, as well as further improvements in the structure of the Philippine sovereign debt stock.
•  The main factors that could lead to a negative rating action, individually or collectively, are:
• A reversal of reform measures and deterioration in governance standards.
• Sustained fiscal slippage, leading to a higher fiscal debt burden.
• Deterioration in monetary policy management that allows the economy to overheat.
• Instability in the banking sector, leading to a crystallisation of contingent liabilities on the sovereign balance sheet.

• Key Assumptions .The ratings and Outlooks are sensitive to a number of assumptions.
• The agency assumes the Aquino administration will persist with its fiscal, governance and social reform agenda.
• Fitch estimates trend GDP growth for the Philippines in a range of 5%-5.5%.
• The ratings incorporate an assumption that the Philippines is not hit by a severe economic or financial shock sufficient to cause a significant contraction in GDP and trigger stress in the financial system.
• Fitch assumes that there is no materialisation of severe risks to global financial stability that could impact emerging market economies, such as a breakup of the euro zone or a severe economic crisis in China.

A Portrait of the Philippines as a Young Nation

Every once in a while it is good to pause to try to pull together some of the varied thoughts dumped out day to day in these blogs. Rather pull chaos back into order, if you catch my drift. So let's do a little of that. If it seems deja vu, relax; it is not a mental disorder, at least, not yours. It is merely a review of what has been said before.

Maybe it is helpful to start with a long distance view and then drill down. And from our eye way up in the sky, we can see that the Philippines is a young nation. Younger than the United States. Younger than you might imagine, reflecting on 500 years of Spanish Catholic influence.

The Philippines is situated smack dab in the center of the crescent of Asia that runs from Indonesia in the southeast, westward to Malaysia, Viet Nam and neighbors, northward past China and on to the northeast where Korea and Japan complete the crescent.

No nation in the world is better situated to prosper in an integrating global world. It is at the point of parabolic focus of the most dynamic region on earth.

What is a nation? I contend that it has a time-of-birth date-stamp. A nation is the community that is formed when people reach an agreement about how to govern. Or when a few powerful people definitively impose their rule. The date stamp is whacked into history when that agreement is finalized or rule is declared.

The Philippines was established as a new nation in 1987. The agreement ended the Marcos nation. A new, democratically ordered nation was formed under President Cory Aquino who began her term on the wings of prayer and ended it wrestling mightily with the forces of favor and power.

These forces of favor and power in the Philippines, and the corruption they spawn, are like a smoldering fire in the tundra. Hard to stamp out. Burning underground. Smoke suffocating everything, including good works. Occasionally flaring up and burning bright. 

The Philippines is trying to reconstruct democratic values but old habits, old ways of conducting business, die hard.

Let's try to characterize the Philippines today. It is good to use the Edgar Lores method of enumerating ideas for ease of reference in the follow-up discussion. Call it a portrait by the numbers. Not artistic, perhaps. But maybe interesting to look at.

1. The reconstruction is the building of democratic institutions and values that allows the nation to progress from being a nation of and for the empowered - Marcos culminating the failed ideology of power - to a nation of and for the people. The public institutions have been rebuilt, perhaps of rough clapboard rather than polished mahogany, but the framework is nonetheless good. The values . . . not yet.

1. A deeply embedded dynastic, somewhat authoritarian, network of power and wealth still controls who runs things and it does not give up its grasp easily. Fortunately, these networks are under considerable pressure from a public with louder and more aggressive spokespeople demanding information and accountability. The internet is the medium of modernization. The Big Brother listening post is with the people, not the politicians.

2. Alas, the most important institutions of accountability, the police and the judiciary, are under the influence of the empowered. Justice has not yet reached the people.

3. The forces of the corrupt still today act as a brake on good governance. Given the intensity of opposition, President Aquino has done wonders to tip the playing field toward honest  governance.  It will take perhaps 20 more years of honorable leadership to put the people fully in charge.

4. A Freedom of Information (FOI) bill would be a huge step forward, sealing openness and honesty into the way government works. If the people are the "boss" of government, they need information. Lacking FOI, we know the favored and powerful, the corrupt of good will if not money, are still in charge.

2. The nation's educational system is both fundamentally amazing, yet failing on two counts.

1. It is amazing in that so many schools, so many teachers, and so many kids recognize how important education is. They are working broadly and steadily at building, teaching and studying to advance the knowledge and skills of young people, and to care for their nation's future.

2. One huge failure is the nation's inability to keep up with the flood of babies born of Catholic tradition. A poor nation is a poor nation. It can only build a poor network of schools. The solution, of course is threefold: (1) make the nation richer, (2) allocate education as a higher priority than other expense choices, and (3) slow the birth rate. You can do one of these three things and not realize much progress over the long term. You can do two and make some headway. You can do all three and build an excellent school system. It would help to apply the power of the internet to reduce the overwhelming burden of textbook purchases, school construction and need for teachers.

3. The second failure is the apparent inability of the Educational leadership to comprehend that memorizing information is not a kind of knowledge that goes very far. The Philippine school system teaches mandated obedience, and from that subservience. It does not teach the values that allow obedience to emerge VOLUNTARILY from a deep desire to compete for honest opportunity. If young people today develop ambition for self-improvement, it is in spite of the school system, not because of it. Democracy is a beautiful institution because it is a loud, open, ever-brainstorming collective of competitive problem-solvers. It assures both security and opportunity. It requires an educated citizenry to operate well, and when it operates well, it is an unmatched system for motivating its people with the promise of opportunity, growth and wealth.

3. Philippine culture is much like the educational system, both good and bad. It is tremendously rich. Unique. Precious. And it is dysfunctional.

1. The bonds of faith and family are profound in the Philippines. So is historical appreciation of the many separate islands and regions, and the native traditions, the land and sea-based traditions, the family traditions, which remain strong even today.

2. It is unfortunate that the nation's moral anchor, the Catholic Church, chooses to condemn knowledge-based progress, provoking a raw political clash, rather than relish the part it could play as the anchor to good values within a culture that is modern and working hard and earnestly to solve problems. Problems like education and poor homes on the mud banks and teen pregnancies and kids dining from trash piles. The prominant moral voice has become a counter-productive, complaining voice, not a voice ministering to the nation, helping it build.

3. Filipinos are passionate people, but the passions are used poorly to denigrate and attack and tear down rather than discover and seek knowledge and build. Minds are closed quickly and defended harshly. This is a 100 percent nation. You are either 100% MY way or you are 100% my enemy. 95% is not good enough. And "if you are the President of my nation, you must be 100% right, doing it my way, or I will attack you, not just your acts or decisions, but you, personally". It's hard to have a unity, a harmony of unique individuals, a nation, if everyone insists their way is the only way. 

4. President Aquino is vastly underappreciated, even by the yellow hordes who pushed him into office. Here is a man with the courage and strength of character - his father's determination and his mother's good will - to try to move a nation out of the darkness of cheating, poverty and poor behavior and into the light of modern, honest governance, productivity and wealth.

1. Every institution or group that finds its opportunities constrained becomes a critic. The corrupt, the Catholic Church, Arroyo and her backers, the smugglers, people who live by skimming from contracts, DENR officials, corrupt generals, a wayward Sultan's teammates, and any 100 percenter who finds one of his pet oxen gored. CHINA is not the main enemy. No, China is in second place to the critics with oxen gored by the President's initiatives; their divisive cries always suggest there is a better way but they usually point to none. There is no better way. Most of the critics are simply those who cannot get outside themselves to build a patriotic community called "nation".

2. But get past the acrimony and we can see that the deeds being done by the national government are no longer being lined up to benefit the empowered. They are being lined up to build a nation that serves its people. The accomplishments are in plain daylight but obscured by all the dirt thrown by the miserly and small of pride, the envious, the bitter, the biased and the intellectually bankrupt. Look at agencies like the central bank and Finance and BIR and Justice and DOT and Tourism and DILG.  And the Ombudsman. And Foreign Affairs. These agencies are working diligently to build a better Philippines. To put in roads to airports, to jail the cheaters, to collect much-needed revenue, to modernize airports, to get airplane servicing up to par to re-open European flights. To improve the nation's debt rating and attract more capital, to get peace and prosperity into Mindanao, to solve Mindanao's electricity problem. To better prepare for storms. The amount of good works going on is flat out awesome. High rises and casinos and a real middle class and more and more tourism jewels like Palawan emerging from the corrupt fits and starts that characterized pre-Aquino Philippines.

3. In this new nation that welcomes good governance, we see the people's voices being raised again and again, louder and more purposefully. It was the people's voice that got RH passed, that got a poorly structured Cybercrime Bill halted and into the Supreme Court, that got a wayward Chief Justice thrown from office, and that will determine what quality of character emerges in the 2013 elections. We see attorneys making a reputation by defending the people. We see congressmen like Sotto who betray the values that people admire driven into silence.

There is only one course for this young nation. It is toward honesty and good works. Toward decisions that benefit the people, not the empowered. Toward problem solving and wealth.

If we focus on the broader picture, rather than the many specific acts, we can see that the anti-corruption drive is not just the jailing of bad people. It is remaking a nation's character. It is laying the foundation for good works that can, over time, ease the nation's burdensome poverty. Attention to two other master initiatives would add to this foundation, building a framework of steel and assurance of greater prosperity and a healthy, long term future: (1) building Education to ease physical demands and teach problem-solving disciplines rather than discipline, and (2) building Justice to assure fair and firm enforcement of laws feeding a forthright, efficient, law-based judiciary. 

FOI is critically, critically important to seal the nation to candor and honesty. Information is the currency that replaces favor and power as the driver of deeds. Information assures that the doing of good deeds on behalf of the people becomes this nation's cherished work ethic.