The funny thing I have noticed over the last year is the way the governments in the West have tried to deal with the economic issues on the economies at the same time smiling and putting a brave face on it as if its going to be ok tomorrow. Today someone sent me an article over regarding Birmingham council who has to clip £180million off its expenses over the next 4 years out of its £1billion budget. It may sound a lot but from experiences within that sector I have seen over expenditure on many things that simply aren’t needed. There will always be the push on “front line services” but they forget to mention the perks they receive such as final salary pensions, early retirement, being able to go sick on full-pay all things most of the rest of the UK cannot get. Then there is a lot of other things that you can research of misspent money. What the government is hoping to do is fill the gap with the private sector but its still not admitting there is a problem that the social system is still way too big and far reaching it needs to drop a lot of the things that do not make any sense and simply get rid of them completely.
Now how does this affect the Philippines your wondering, the whole of Europe and the US are busy shuffling their finances into better positions to reduce debt. The result of this is that the economies are going to remain weak for some time. The result of that being due to the way the Philippines is setup unless things like the healthcare sector reduces worldwide the Philippines remittances will still remain high which in turn will keep the Peso afloat. Downside of that is that your Euros, Pounds or Dollars are going to remain in poor shape for the near future. The UK economy is talking 20 years for a full-recovery but realistically as long as they keep the changes happening the pound should start to improve but not by a lot. Currently about 20-30% has been shaved off its value against the Peso. As a retiree I wonder how many are actually rethinking staying in the Philippines, I have heard people talking of Panama as well as other locations to move to due to being a cheaper and more “foreigner friendly” environment. If the Philippines government isn’t careful it could lose some of the billions of pesos that enter the country via these pensioners to more accepting nations. I could cover the reasons to go over to Panama over the Philippines but I will do that in another topic.
The artificially inflated Peso is the biggest reason people are grumbling though as it affects the pension funds arriving into the country. At the same time the pensions are doing exactly what people are doing with the remittances “inflating” the value of the peso!