(The author is an economist.)

MANILA, Philippines -- Filipinos are in excellent condition to survive and to grow out of this global economic crisis.

Fundamentally, our economy is resilient, borne by a spirit of self-empowerment and resourcefulness.

We are in a place where people find ways to get by and even prosper, and only the minority depend on government. It’s a place where the great majority depend mainly on themselves and thrive on hard work, perseverance, self-sacrifice and a strong faith in and love for God and country.

It’s a place where the majority are kind and honest, where moral values reign supreme, where small acts of kindness and generosity can evoke a big smile and a warm sense of gratitude.

We are in a place where just a million centavos can generate a million bright ideas, and with it comes a lot of enthusiasm.

From where we are, it’s a heady situation watching Wall Street nosedive, knowing that no one has the power to stop it, not even United States President Barack Obama. And even if the free-fall was so apparent in the charts a few months ago, it was still difficult to take it all in when it happened.

I was a stockbroker for most of my career and worked for powerful institutions like Citibank and UBS. These global banks taught me a lot about reading markets, risk analysis, forecasting, good governance and capital market development. Sadly, however, many Wall Street institutions eventually yielded to pressures of conformity and compromise which slowly dissolved the moral compass that had guided them for so long, a compass that would have deterred them from running straight into this catastrophe.

White knight mentality

It became a system that fed into unconditional patronage which, in turn, silenced those who questioned the norm even if they had every reason to do so. Wall Street also thrived on a white knight mentality which made it easier to hide the outcome of poor decisions.

White knights come in many forms. They come in as creditors or as new shareholders through IPOs (initial public offerings), mergers and acquisitions, consolidations or private equity. Nothing wrong with that. They are, in fact, good for the system.

But white knights can also be abused; or contrarily, some white knights can have their own dark agenda. That said, white knights have become a common refuge for many weak institutions, so common that they eventually fostered institutional greed, weakness and complacency.

We now see the ill effects of such unconditional patronage with the global crisis ravaging the largest and primest of institutions. None of these white knights are left standing. Even the influential investor Warren Buffett’s fund showed a severe contraction last year, he won’t have much of an appetite to keep on buying disgraced institutions and distressed assets. He will need to be more discriminating because bargains now abound in Wall Street. The question is, which ones will survive and recover?

US, China

In the eyes of the global market, the white knights left standing are the governments of the US and China. The US government is a natural choice first, because it should face the consequences of its poor regulation and complacency. And second, because even without ample reserves, it thinks it can borrow its way out of the crisis and just keep on printing money. Kids in the US are too young anyway to know that they will end up paying for these bailouts from their future incomes. Poor kids...

And China? Well, it has massive reserves and is the US’ largest lender to date. But many who think that China can and should save the world are not only foolhardy but are downright inconsiderate. What has China got to do with this crisis? Admittedly, it is a large exporter to the US and the rest of the world, so it stands to benefit from a global recovery. But China has more than a billion mouths to feed, many of which still fall below the poverty line. Its funds are best spent enriching its own population, a huge market that can potentially sustain the growth of the Asian region and the rest of the world. The financial markets have no business saying that China is not releasing enough stimulus funds because a million dollars spent in China can go a much longer way than a million dollars spent in the US.

Era of reckoning

Interestingly, we have become valuable witnesses to a historic event unfolding as we breathe. We now live in an era of reckoning for Wall Street’s double speak, one that led to monstrous institutions which, to this day, hide behind the mantle of overly generous credit ratings, regardless of their shameless pleading for endless bailouts.

The painful reality is we haven’t seen the worst yet. Events continue to unfold, suggesting that more losses could emerge from large financial institutions and manufacturing companies, possibly in the next two quarters, and with that goes more downsizing and job cuts, particularly in the US.

This means over and above the four million Americans who are now jobless and millions of homes still on the verge of foreclosure. This also means that some banks haven’t yet reflected their contingent losses on home mortgages frozen by a debt moratorium for homeowners until a government scheme can be put in place to assist them.

It’s situations like this that have the propensity to change the global landscape for political and economic power.

The good news is, it is pregnant with opportunities because the crisis has a sobering effect on the environment and on economies. The strongest and most prepared will survive. Those who survive will grow to be much larger and stronger.

It’s a good time to keep a very open mind for radical and out-of-the box solutions because new avenues for growth and development will emerge and so will new business models.

Learning from crisis

Let us learn from this crisis, but more importantly, let’s start finding ways to get out of it unscathed. It’s good to keep the government in mind. But government will be too busy with the upcoming presidential elections. Its resources are limited and its ways unpredictable. It is only rich with promises.

As private citizens, let’s focus on being productive and make the most of our God-given talents and our country’s rich natural resources. Let’s help those who stand to lose their jobs to become productive in other ways. Let’s believe in our strengths and our creative skills. We are a strong nation and a strong people. We have the power to take control of our own destiny. But, first things first, let’s believe that we are and believe that we can.

(The author is vice president of SM Investments Corp.)