NBQs on the Philippine Dragon Boat Federation team

First off, I would like to congratulate the Philippine Dragon Boat Federation (PDBF) team which just arrived today and was awarded a presidential citation in Malacanang Palace by President Noynoy himself.

President Aquino with the PDBF team (courtesy of Gil Nartea, Malacanang Photo)

It has been a while since I raised no-brainer questions in this blog.

I believed the last time I did so was during the campaign period for the May 2010 presidential elections.

A favorite of readers: would candidate Dick Gordon sue the survey outfits–Pulse Asia and Social Weather Stations–for supposedly failing to get his approval to get himself included in the surveys IF he was not consistently among the survey tail-enders?

An opportunity to raise an NBQ arose recently.  By now you are aware that the Philippine Dragon Boat Federation (PDBF) team has grabbed five gold medals and two silver medals during the recently concluded 10th International Dragon Boat Federation (IDBF) in Tampa, Florida.

Philippine dragon boat team

What made the effort even more spectacular was that our paddlers established world records in all 5 events they won in Tampa.

However, the stellar achievement is dimmed a bit since none of the victories were in the standard boat category (with 20 paddlers).  All of them were in the short boat category (with only 10 paddlers).

Apparently, the PDBF team did not have enough financial support to prepare for the standard boat competitions.  In fact, it reached Florida only through the help of private sponsors such as the Philippine Air Lines and the manufacturers of Cobra energy drink.  For this reason, it was known as the Cobra Philippine Dragon Boat Federation Team.  Publicity was drummed up by the media giant ABS-CBN.

On the surface, the team’s financial difficulties started when the PDBF was stripped of its status as a national sports association (NSA) by the Philippine Olympic Committee.  If it was still an NSA, the PDBF would be entitled to government funds and its team would be officially recognized as a national team.  Then it could have competed in the more prestigious 20-paddler standard boat races in Tampa.

Insiders intimate that the Philippine Olympic Committee and the Philippine Sports Commission wanted the Philippine Dragon Boat Federation to subsume itself another another federation, the Philippine Canoe and Kayak Federation, which was a recognized NSA, so it could gain public funding. When the PDBF refused, it no longer was an NSA.

And that’s not all.  POC Director Col. Jeff Tamayo pooh-poohed the PDBF’s Tampa victories by claiming they were made at the expense of weak or beginners’ teams.

POC Director Jeff Tamayo

One of the results of the PDBF victory in Tampa were demands by some Senators for an investigation into the lack of public financing  of the PDBF team.

Two no-brainer questions:

Would these same Senators demand such an investigation if the PDBF team did not win in Tampa?

Second, does a dragon boat look even remotely like a kayak or a canoe?

Let’s take another look.

Kayak

Canoe

Dragon boat

From AAA to AA+

A last minute compromise between Democrats and Republicans last week may have averted a debt crisis and bankruptcy in the United States last week.  

However, it was enough to stop Standard & Poor’s, the ratings agency, to downgrade US debt paper from a pristine AAA to AA+ (with a negative outlook),  the first downgrade in U.S. history and a vote of no-confidence in the world’s largest economy and its political leadership.

The ratings agencies

The move is likely eventually to raise borrowing costs for the U.S. government, companies and consumers.

By calling the outlook “negative,” S&P signaled another downgrade is possible in the next 12 to 18 months.

It was another ratings agency, Moody’s which assigned the AAA rating in 1917.

Moody’s and Fitch, the two other ratings agencies retained the AAA rating but Moody warned it has a negative outlook for the US.  This means that a downgrade is possible in a year’s time.

S&P intoned:  “The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges.”

The ratings agency put forth a blistering view of Washington partisanship, adding that “we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy.”

One lawmaker offered an equally biting retort.

Rep. Barney Frank (D-Mass.) angrily denounced the ratings downgrade, saying S&P was “trying to justify their reputation” after failing to spot problems in the nation’s financial system before the economic crisis of 2008.

Rep. Barney Frank (D-Mass)

“These are some of the people who have the worst records of incompetence and irresponsibility around,” Frank, the top Democrat on the House Financial Services Committee, said on MSNBC.

Writing at the New York Times, Paul Krugman ironically pointed out that it’s hard to think of anybody less qualified to pass judgement on America than the ratings agencies given their previous endorsement of sub-prime mortgages.

Paul Krugman

The Obama administration attacked the credibility of the analysis underlying Standard & Poor’s decision to downgrade the United States’ top credit rating on Friday, saying it had found a $2 trillion error.

S&P was forced to remove the number from its analysis after Treasury officials discovered that the rating agency’s estimates of the government’s discretionary spending was $2 trillion too high.

There was evident dismay, and some anger, within the Obama administration at S&P’s decision to downgrade U.S. debt despite the errors officials said they had found in the calculations.

“A judgment flawed by a $2 trillion error speaks for itself,” a Treasury spokesman said after S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits.

The comment marked the first time the U.S. Treasury had publicly chastised S&P. Administration officials have privately grumbled that the rating agency’s understanding of the U.S. political system was unsophisticated.

Notwithstanding S&P’s past record, its downgrade of the US credit rating has made its mark.  Across the world, stock markets crashed amid fears of economic slowdowns in both the US and the Eurozone.  Asian bourses were not spared and the Philippine Stock Exchange gave up 1.42 percent in last Friday’s trading.  

The country’s financial authorities are also concerned since we hold about US$26 billion in US securities, and most of our gross international reserves (GIR) are also in US instruments. The US market itself is a major export destination for Philippine manufactures and the appreciation of the Philippine peso vis-a-vis the US dollar will dampen American demand for Philippine products.  

China, the US’ biggest creditor,  said Washington only had itself to blame and called for a new stable global reserve currency.

“The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” China’s official Xinhua news agency said in a commentary.

Peoples' Republic of China--the US' main creditor

In the Xinhua commentary, China roundly condemned the United States for its “debt addiction” and “short sighted” political wrangling and said the world needed a new stable global reserve currency.

“China, the largest creditor of the world’s sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China’s dollar assets,” it said.

It urged the United States to cut military and social welfare expenditure. It also said further credit downgrades would very likely undermine the world economic recovery and trigger new rounds of financial turmoil.

“International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country,” Xinhua said.

S&P blamed in part the political gridlock in Washington, saying politics was preventing the United States from addressing its deficit and debt problems.

British business minister Vince Cable backed China’s call for a new stable global reserve currency but said that for the moment the U.S. dollar remained key.

UK business minister Vince Cable

“Frankly, the American legislators made a terrible mess of things a few weeks ago, they have now got back on track, they have undertaken to manage their debt in a prudent way,” Cable said.

Cable’s remarks may be bitter pills for China to swallow.  As the US’ largest creditor, China has the most to lose with the downgrade of US credit ratings.  Indeed, American legislators have a played a part in the latest crisis.  However, China shares some of the short-sightedness herself.  America’s economic woes did not arise overnight yet China chose to continue investing in US treasury bills.  Prudence should have cautioned her to diversify her investment portfolio.

The markets are in for a ride in the weeks to come.

President Noynoy’s Narita gamble

Thursday night last week, as parts of the country were still reeling from the strong winds and rains unleashed by the tropical storm Kabayan, President Noynoy Aquino left the country and flew unannounced to Japan to meet with Murad Ebrahim, chair of of the Moro Islamic Liberation Front (MILF), in a hotel near the Narita airport.

President Aquino meet with MILF chair Murad Ebrahim in a hotel near Narita Airport (courtesy of Philippine Daily Inquirer)

The MILF is one of two armed organizations of the Bangsa Moro people in southern Philippines.  The other one, the Moro National Liberation Front (MNLF), has concluded its final peace agreement (FPA) with the Philippine government in 1996.  Irritants continue to sour relations and both government and MNLF are negotiating an implementing accord of the 1996 FPA.

MILF fighters

Meanwhile, the government and the MILF got a fresh start after the 2008 debacle where the Philippine Supreme Court adjudged the framework agreement as unconstitutional.

Teresita Quintos-Deles, the presidential peace adviser who was with Noynoy in Tokyo, said Murad and Aquino discussed ways to push the peace process forward.

An official who spoke on condition of anonymity said the meeting was meant to give the peace talks “a shot in the arm” and show support from the “highest level.”

It appears that President Aquino had sought the meeting, which have been in the works since late June since he wanted to fast-track the peace negotiations and the implementation of peace agreements with the Muslim insurgencies.

Was it necessary and proper for the President to meet with MILF chair Murad Ebrahim?

One of the President’s closest allies, Senator Francis Escudero, opined that the President may be ill-advised to meet personally with Murad.  It would have been sufficient for Presidential Peace Adviser Teresita Quintos-Deles to talk to Murad.

Meanwhile, House Minority Leader Edcel Lagman curiously observed that President Noynoy’s secret trip to Japan was a violation of the promise of full transparency.

I tend to agree with those who believe that the wisdom of the President’s move cannot be fully determined just yet.

If it will help lead to a durable peace between the government and the MILF, then his Narita gamble will have paid off.