The media campaign to Stop Humala At All Costs continues in Peru and today we have breathless headlines from the main anti-Humala media sources telling the world about a run on the private pension funds. The basic story behind this is that a whole spook story went around a couple of weeks ago about how Humala would tap into the private pension funds (known as AFPs) to fund his social programs or even fund the State pension burdens. So today we get this in El Comercio with the title "Uncertainty Affects Loans and AFP Contributions" interviewing the biggest AFP that says they've seen 55 million Soles (U$19.6m) out of their 320m liquidity fund withdrawn over the month. Or we have this in Peru 21 (owned by the same people as El Comercio, but lower brow) entitled "Contributions Withdrawn from AFPs" that tells of 87 million Soles (U$31m) taken out the overall system and perhaps more to come.
Hey wow, 87m sounds like a big number doesn't it? Or when you compare a single fund's 55m in withdrawals compared to a 320m liquidity fund, that's a chunky percentage, no? Hmmm...well y'see that's not the real reality because it's a better thing to compare the total withdrawals to the total amount of Assets Under Management at the AFP Pension funds, which looks like this:
The total AFP assets from Peru Central Bank figures right here. Look, I'm not sticking up for Humala here and speaking frankly I think both the choices left in round two are bad. What I am saying is the same thing as I said in IKN105 to subscribers last Sunday:
"Well folks, like it or not unfair media bias isn’t confined to Peru or even South America and a smear campaign against Humala was always going to happen."
DYODD