THE ongoing Senate investigation into the controversial $329-million ZTE-NBN contract may be the most frequently reported event these days, but it is not a significant factor behind the behavior of the stock market, or even the economy.

If we’re talking of the stock market, people would normally wait for the outcome—whether it will blow over or really affect the country’s stability.

Actually, the departure of foreign investments from the Philippine stock market has been happening since last year, even before the NBN-ZTE deal became the daily news fare of broadcast and print media.

The main reason for the departure of what is called “hot money” was the concern about the looming recession in the United States, its impact on the global economy, oil prices and the fears of high inflation. These are all external factors that have nothing to do with us.

The good thing is that stock-market investments come and go. Such so-called hot money comes here today, goes away tomorrow and back again the following day. The reason there is some foreign money still left is because prices have gone too low.

Even domestic investors in stocks behave the same way. They buy when prices are low, and then sell when prices are high. As long as capital goes through this cycle, the stock market stays healthy.

Now, with respect to the economy, I also don’t see any significant impact from the Senate investigation. Our concern is like those of other countries: the United States is still one of our major export markets, source of tourists and remittances from overseas Filipinos. It is also a major market for countries that buy raw materials and goods from the Philippines. And so, an adverse impact in those countries will also affect us. It’s called the ripple effect.

I agree with the consensus among market analysts that investors have already discounted the NBN-ZTE controversy. At least in that respect, I agree that the Philippine economy remains strong, and that investments continue to come in.

Actually, I think that despite its controversial nature, the Senate investigation is helping define our democracy. And I like to believe that this is the aspect that investors see. That’s why they continue to do business in the Philippines.

A number of our citizens or some sectors may seem unaware of this rationale. The current probe is based on the constitutional principle of check and balance in which each of the three branches of government—the Executive, Legislative and Judiciary—makes sure that none of the three abuses or exceeds its authority. That is why the Senate has, in addition to its lawmaking function, another equally important mandate: to fiscalize.

When we conduct inquiries into alleged irregular transactions like the NBN-ZTE deal, it means that the Senate is not closing its eyes to allegations of corruption and other violations of the law and of the Constitution. It is recognized that there will be attempts to discredit the investigation, the witnesses and the institution’s motives by attaching labels like politicking or even trying to destabilize the government.

But I believe that Filipinos are politically mature to see through the weak defenses being put up to stop the inquiries and prevent the Senate from exposing the truth. And I also believe that foreign and local investors, and even the international community, the credit-rating agencies and the multilateral institutions, see the positive side—that we do not tolerate corruption.

Eventually, I hope our efforts to halt corrupt transactions and wrongdoing in government will improve our image in the international community and make the Philippines an attractive investment site.

So, if our concern is the economy, we must watch the US economy and the world oil prices closely. And, at the same time, we must continue to strengthen our fundamentals. Our overseas workers, who have been boosting our economy with their dollar remittances ever since the ’80s, must receive all the help and all the incentives they deserve, if only to recognize their contribution to the national interest.

The business sector must be encouraged to invest more and produce more—by reducing red tape and minimizing government interference, for example—so that they can generate more jobs and more tax revenues.

More than all this, we must increase our efforts to fight poverty. The recent report from the National Statistical Coordination Board about the increasing number of poor Filipinos is very disturbing. It shows that the 31-year high growth in our gross domestic product at 7.3 percent in 2007 is not enough. I have repeatedly said that we need to grow at that rate or higher for four or five years to make sure that the poorest households enjoy the benefits of economic growth.

The Senate is doing its part in alleviating poverty and improving the economy. I personally introduced a bill that will exempt minimum-wage earners from paying income taxes, and I am pushing for the passage of legislation to rationalize investment incentives based on the recommendations of the business community itself, including the groups of foreign investors in the country.

Ours is a healthy democracy and, as I said, this is what investors see in the Philippines. We will continue to be vigilant against corruption, and we will be keen on driving the economy and improving the lives of our people. 

You may send your comments/feedback to mbvillar_comments@yahoo.com.

Just how serious is the Arroyo administration in fighting corruption? 

If President Arroyo is to be believed, her administration is determined to put an end to malfeasance in the bureaucracy.

However riveting the reading, turn away for a moment from those pages in the FBI affidavit concerning “Client 9” and “Kristen.”

THE ongoing Senate investigation into the controversial $329-million ZTE-NBN contract may be the most frequently reported event these days, but it is not a significant factor behind the behavior of the stock market, or even the economy.

Coast-to-Coast: It’s the economy, ‘pare’

Those “Ramdam Ko” (roughly, I Can Feel) ads playing on TV featuring testimonials of citizens from all walks of life feeling or experiencing the impact of the touted economic gains since 2001 under this administration is a powerful reminder of where lies the regime’s resiliency in this time of turmoil.

Personal Finance: The challenges of life-insurance professionals

When I was still in life-insurance sales (in an agency), which seems to be eons ago, I felt that there was a great need to start evolving our practice.

Reflections from the Mirror: A season of forgiveness

It’s neither too early nor too late to greet the Filipino people “Happy Easter,” and in so doing, I hope that as we celebrate Christendom’s observance of the passion of the Lord, we also reflect on the state of our nation which is being torn asunder by selfish politicians and disgruntled elements who eat breakfast,

Dean de la Paz: Senate Suckersville

What started out as a righteous, albeit indignant, Senate inquiry into high-level corruption within the sacrosanct, though sanctimonious, corridors of the Executive has, by deliberate design, degenerated into the absurd.