Philippines Will Weather the Financial Crisis -- Monetary Board Member

Being a developing country may not be that bad after all, especially in these times of crisis.

Central Bank Monetary Board Member and concurrently Vice Chairperson of the Silliman University Board of Trustees Prof. Juanita Amatong explained that the Philippines will not be as badly hit by the global financial crisis.

“But it would be very foolish to dismiss the impact of the crisis on our lives,” she cautioned the audience composed of students and faculty members of Silliman University at the Audio-Visual Theatre.

Professor Amatong’s lecture on January 6 focused on the global financial meltdown and its impact on the Philippines.

A Sillimanian who holds the distinction as the first woman Executive of the World Bank Group and the country’s first woman Secretary of Finance, Professor Amatong was optimistic that the Philippines will be able to weather the financial crisis. This statement was backed by the International Monetary Fund which said that the country is well-insulated from key transmitting channels of financial strains affecting other emerging economies.

Unlike Hong Kong and Singapore, she said the Philippines has an underdeveloped capital market that its exposure to investment banks that have been badly hit by the financial crisis is minimal. Foreign funding to domestic banks in the Philippines also remains low, unlike banks in Singapore that use sophisticated instruments such as derivatives to seek resources outside. The steady increase in the gross domestic product (GDP) of the Philippines also proves that the Philippine economy is less volatile.

Professor Amatong also pointed to the favorable position of the country's external payments. At present, she said foreign exchange inflow (spending inside the Philippines) against foreign exchange outflow (spending outside the Philippines) still registers a surplus.

But while she expressed optimism, she said the impact on the Philippines will come from trade, remittances, and investments.

The global financial crisis that rendered some Filipinos abroad jobless and have made life in countries like the US more challenging, will affect remittances to the Philippines. She said 30 percent of Filipinos abroad are based in the US. This gives weight to projections on the reduction in remittances starting 2009.

In terms of trade, the US, she said, accounts for 17 percent of the Philippines' total exports. While this is 30 percent less than the country’s exports in 2000, the impact of the financial crisis on other trade partners of the US, which are also trade partners of the Philippines, will affect proceeds from trade.

Unlike exports, the US accounts for 30 percent of foreign direct investments in the country. This is 12 percent more than US investments in 2000. The financial crisis, she projected, will affect the flow of US investments.

“But because we Filipinos have endured tough times, our resilience will carry us through,” Professor Amatong said.

Explaining the global financial crisis, she discussed how the long period of stability and rapid growth has bred complacency and led to the failure to anticipate and address financial challenges.

At the time when the inflation rate in the US was high, she said, there were several programs implemented to encourage spending. Especially after the September 11, 2001 attacks on the World Trade Center, the US Federal Government lowered interest rates to close to 1 percent.

Low interests made mortgage loans very attractive. Because the houses for which mortgage loans were made became the collateral, and their value was foreseen to appreciate, banks ventured into sub-prime lending. This was when mortgage loans were made available even to borrowers who were originally not qualified due to low income or poor credit performance. Profits were then seen from sale of foreclosed properties.

Because debt is entered in the financial statement as an account receivable, thus an asset, it was not a problem for banks to dispose of the loan collaterals to third parties. This process of what simply is freeing up of account receivables by packaging debts into negotiable instruments, like bonds, and known as “securitization,” gave rise to excessive lending by banks.

But, Professor Amatong said, when the interest rates went up, people were discouraged to borrow, so the cost of housing plummeted. This led to the erosion of the value of the collateral supporting the loan, hitting big financial institutions holding mortgage-backed securities. This was worsened by default payments for debts secured originally from the banks but now in the possession of third parties as mortgage-backed securities or collaterized mortgage obligations by virtue of securitization.

Banks then started refusing to lend to third parties. Exacerbated by default payments and complicated by growing interest rates, a tool to influence borrowing and spending, third parties had to look for an alternative source of funds: the government. Thus, the bailout.

Professor Amatong said governments do bailouts and give tax rebates to save a frozen financial market and prevent the drying up of liquidity. The move is also to encourage economic activity and cushion impact on stocks and prices.

What started as a domestic financial crisis affecting the local subprime market esclated into a global financial crisis. While she said the Philippines will not be as badly hit, she advised the audience not to panic by withdrawing their deposits from banks and to be wary of “get rich schemes.”

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CHED Reaffirms COE in Nursing Education Status of SU

Silliman University maintains its distinction as a Center of Excellence (COE) in Nursing Education after the Commission on Higher Education granted its application. Only six out of 14 schools that applied were given COE status.

COEs and Centers of Development are higher education institutions both public and private which have demonstrated the highest degree or level of standards along the areas of instruction, research and extension.

Silliman is a COE in Nursing Education and Teacher Education, and a COD in Accountancy, Biology and Information Technology.

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Silliman Wins in Debate Tournaments

The year 2008 was capped with pride for Silliman University as members of its debate team beat the team from the University of the Philippines Manila on national television last December 17, two days before the holiday break.

Silliman advanced directly into the octofinal round of the second season of Square Off: Frankahan – The Drilon Debates, and did not undergo eliminations, because of its performance as quarterfinalists in the first season.

The motion was “This House believes that the Armed Forces and the Philippine National Police should welcome gays and lesbians into service." Silliman, composed of Theresa Amor (Nursing), Clyde Gregorio (Political Science) and Micah Dagaerag (Political Science), was government. The three are members of the Silliman University Debate Society, the umbrella organization of Silliman’s debate clubs in college, high school and elementary.

Silliman asserted that the military is not the avenue to advance gay rights because it is not a microcosm of society, not a democracy and not a free market of ideas. The military serves a particular vital function, which would be compromised by changing policies that have proven to be effective all this time. They also suggested taking the cause of homosexual empowerment to the streets or Congress.
It was the Silliman team's argument for the need to protect and preserve the macho culture - which one judge acknowledged as showing "balls" - that made the strongest impression.

Dagaerag, who was rebuttal speaker, received the texters’ choice and the jury’s choice award for best speaker.
Silliman is the program’s second octofinalist and the only one from the Visayas. It is scheduled to debate early this year in the quarterfinals round with other octofinalists from Manila.

Square Off: Frankahan – The Drilon Debates airs every Wednesday, 8-9PM, on ANC Channel 21.

Meanwhile, the Silliman University Moot Court Team ranked fifth out of 14 law schools in the National Moot Court Competition on International Humanitarian Law (IHL) held in November last year.

Oralists Terrence Callao and Ma. Zusabel Digaum took the first match with Arellano University and the University of Batangas for the second match in defending and prosecuting certain fictional individuals under the Rome Statute of International Criminal Court (ICC) and the Geneva Conventions and the Additional Protocols.

The team also bagged the second Best Memorials, next to the team from the UP College of Law.

Completing the SU Moot Court Team were Elizabeth Karla Aguilan (alternate oralist and team manager), Ramon Ruperto (head researcher), Jian Wasawas and Bryce Tenorio (researchers). Atty. Sheila Lynn Catacutan-Besario served as coach with Atty. Jose Ramon Nakao as assistant coach. (credits: ABS-CBN News online)

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SG President is Top 2 Rizal Model Student
Student Government president Stacy Danika Alcantara placed second in the 2008 Search for the Jose Rizal Model Students of the Philippines at the Knights of Rizal Headquarters in Manila last December 11 to 12.

Alcantara, a Mass Communication senior, ranked second after a preliminary search for the top 20 finalists and after a round of interviews with the members of the Council of Elders of the Knights of Rizal.

There were 108 schools all over the Philippines that fielded in their respective bets for the oldest search of the country’s top students across disciplines.

The awardees were chosen based on academic excellence, leadership potential, and local, national and international involvements, apart from their performance during the final interview.

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‘Spiritual Syncretism’ Discussed at Nat’l Conference
A paper presented by a faculty of the History and Political Science at a national conference in Manila addressed the misconception that cultural enrichment from colonization is only derived from the encroaching power.

Prof. Joseph Raymond explained that colonial experience is complex and can be explained in various contextual themes.
“Colonialism serves as channel for the accelerated mutation of colonized societies, such that, the colonizers in as much as the colonized are active participants in the dynamics of the colonial encounter,” he said.

Professor Raymond was one of the speakers during the 33th national conference of the Pambansang Samahan sa Sikolohiyang Pilipino (National Organization of Filipino Psychology) held in December last year at the Holy Angel University in Pampanga.

His paper, “Spiritual Syncretism: A Discourse on Early Protestantism and its Relation to the Filipino Concepts of Kapwa, Ginhawa and Ligaya,” discussed how as civilizations interact in a world system, syncretism takes place. Syncretism is the blending of elements from different cultural traditions, and the result is that a foreign tradition becomes meaningful in a land far from its source.

“The acceptance of new belief systems is made possible because of its correlation to indigenous values and concepts amongst Filipinos that allowed the new faith to be immersed and understood by the local population,” Professor Raymond said.

He added that there is a link between the acceptance of Protestantism and the concepts and values of karangalan (dignity), katarungan (justice), and kalayaan (freedom) which emanate from a core value of kapwa (fellowmen).

“(These concepts and values) served as cultural bridges that accelerated the acceptance of the new faith of Protestantism since as a result of its reception, it has led to positive emotions of self determination, personal gratitude and satisfaction, and above all, the pleasures of a new found independent spirituality,” Professor Raymond pointed out.

With this, “it is possible to re-image the colonizer and the colonized people as beneficiaries of a shared experience, in that, cultural enrichment is equally attributed to indigenous factors rather than coming from the colonizers only.”