Tangina ang drama mo!!! Napakalalim ng mga insights mo dito, hindi aakalain ng mga mambabasa mo na tinawag ka ng isang propesor na mabagal na baka dahil sa kanyang pag-aakala na wala kang alam kundi manggago ng tao.

That’s right. To save and produce more. And this combination appears to be a fundamental driver to an economy’s sustained growth, as with the Japan example you already pointed out. Even if you put that analogous to a single person, the only way a person can really spend is if that person had saved real money in the first place through productive work.

It’s also interesting to note that even from a macro standpoint, the design and run of a nation’s economy can be built on long-established behaviors of that nation’s citizens. If the Japanese are a people culturally more mindful of saving, then their economy will be run based on that fundamental behavior (w/c is why they have among the lowest interest rates in the world just to encourage spending). It may then follow that with US citizens having a great propensity towards consumption, the US economy was built to spend and spend, w/c can then run counter to the economic fundamental of having to save and produce. They had a backlash brewing early on. In fact, they were borrowing money from other countries in order to spend for consumption… and ironically not for investing in factories and other productive assets. So how could they repay all that debt? To make matters worse, they had already offshored much of their manufacturing and business processes to other countries plus they are talking about further lowering interest rates (w/c will encourage even more consumption). That’s why they’re in trouble. So Peter’s got the last laugh, definitely.

Unfortunately for us also in the Phils, a good part of our economy is fueled by dollar-denominated remittances (again a long-established behavior) and an outsourcing sector with a large US client base. So we’re also feeling the pain. Yet unlike the case for the US economy where much of the value was artificially created on paper, our Asian economies have real savings and real production. So in so far as this slowdown goes, we have resources to weather it through. There’s even good news which shows that among the ASEAN nations, we’re #2 in GDP growth for this past quarter, at approximately 3%. It’s not as good as we’d want. In fact, that’s just half as good as how we did for GDP last year. But we’re hanging tough.

P.S.
Great blog! I’ve been reading through some of your articles of various topics. That’s the kundisyon I know you have a lot of, LOL!

Haha thank you for the very kind comments Justin and for the time you took in reading this blog of mine!

Yes I still firmly believe that the Philippines has room to grow, a lot of it in fact. We have actually some natural resources worth exploiting and not just for whoring out to the foreign firms that offer lots of funds. We can do like the communists and invite foreign investments and finally seize them. I still think we can work our way out of this quagmire through sound economic and political policies and solid follow-through.

freebies:

Wala sarado na ungas. Sayang

hehe, “quagmire.” Nice use of that word.

Yups, I agree. In fact, we still have resources that can distinguish us. Besides manpower, we have among the richest in biodiversity in the world. That can pave the way for sustained growth in pharma. And also one other resource usually overlooked: the sun. Believe it or not, the Phils has potential to be positioned as a center of excellence in solar energy. We’re not just that aware of it yet.

pang henyo talaga blog mo mr. palarca. hahaha

Aah renewable energy. I think it will suffer most when oil hits a new low. But since we’re all becoming more than aware, in fact involved, in alternative sources of fuel I think we’ll be seeing more investments in green tech. I just hope America won’t get its way with how to throw money at research on renewable energy and the consumers should figure out how to integrate more green into their current consumption.

then we should make another project pala justin?

hehe, project on solar? Pwede! But let’s earn ourselves some capital first. It’s cap intensive, nyahaha.