Shoppers plan to scrimp on holiday gifts

If you are hoping a relative in the US will be your Santa Claus this Christmas, you may have to lower your expectations. With the sour economic mood in the US, chances are Santa is not feeling too generous these days. In fact, according to a survey released Thursday last week by Consumer Reports about three-quarters of people there plan to cut back on holiday spending, including travel, gifts and decorations.

But all is not lost. According to the same survey, the vast majority (84 percent) said they plan to cut back spending on themselves instead. Another 40 percent said they’re scaling back on buying for friends and friends’ families. Some 88 percent still plan to make their holiday celebration happy, which presumably includes gift giving to loved ones.

Children should however, expect more clothing than toys this year. A retail analyst told BusinessWeek “in previous years that would have been a ‘because you need it’ purchase, not a gift.” BW also quotes a Miami music producer and mother of two who says she wants to be practical but recognizes that “both of my boys would be making ‘yucky’ faces should they open up a ‘Gap’ box with sweaters.” Children will just have to realize that, as a BusinessWeek headline puts it, “Yes, Virginia, There Is a Recession.”

You are probably better off being nice to your Santa Claus right here in the Philippines. I asked the ShoeMart people how they are doing and Tessie Sy Coson sent word that they are doing fabulously. Unlike in the US, sales in SM stores are up. Year to date, department store sales grew 6.5 percent. They are looking at better second half growth. This does not include the supermarkets which are also expected to perform better.

Tessie attributed all that to the strong remittances of Pinoys abroad. Our OFWs are widely deployed throughout the world. Even if remittances from US banks account for a large share of OFW inflows, some of those inflows from US banks may actually originate from elsewhere in the world. This could not be used as a reflection of the gift giving mood of US-based Pinoys.

Still, the obligation to spread the Christmas cheer to family and some friends is imbedded in the DNA of most Pinoys. They will work to the bone, with some of those Pinoys probably keeping two or three jobs simultaneously so as not to disappoint those expecting gifts from them this Christmas. But if they lose their jobs coupled with some subprime mortgage problem between now and Christmas, they can’t be spreading Christmas cheer as much as they may want to.

“We’re all one degree removed from somebody who has lost a job,” FBR Capital Markets analyst Adrienne Tennant told AP. No wonder ordinary Americans are opting to only buy the things they needed and even then, they wait for the items to go on sale.

The big problem this year is also traceable to lower credit card limits and even outright cancellation of credit card facilities for many consumers. Even if they want to shop, they just don’t have the same access to money through credit that they’ve had in the past.

But Pinoys with relatives in the US shouldn’t lose hope. Reports have it that while it looks pretty bleak for most retailers, Wal-Mart is definitely gaining market share at the expense of everyone else. Wal-Mart typically doesn’t consider itself to be a gift-buying destination, but could emerge as the place to go this holiday season.

From experience, I have noticed that Pinoys in the US patronize Wal-Mart a lot. You can’t be in a Wal-Mart outlet in Southern California for five minutes without hearing Tagalog being spoken. So it is entirely possible that those balikbayan boxes will still be arriving in time for Christmas with a lot of goodies bought from Wal-Mart.

But if you really want to make sure, tell your Santa Claus to just do his Christmas shopping right here where the stronger dollar converted to pesos buys more goodies at SM and that tiangge at Greenhills. My wife just bought a lot of Christmas goodies for our grandson in the States from the tiangge. The quality of the export overruns being sold there are better than ever and more than half the price compared to current prices in the States.

Balikbayans doing their Christmas shopping here won’t benefit the American economy now on the ropes but it would improve the chances of our economy to decouple somewhat from the mess across the Pacific. Of course real decoupling from the American economy is impossible. But if you ask Tessie Sy Coson or simply observe shoppers at one of the dozens of SM malls, it could mislead you to think that we are decoupled after all.

There is one caveat about local Santas. Senate President Manny Villar told me many top executives, high net worth entrepreneurs and very influential politicians lost a lot of money on Lehman and may not be in a giving mood this Christmas. That possibly means lower bonuses for their employees and that sort of thing. The ripple effect may limit a busier shopping season at SM and even in the tiangges. Manny mischievously observed that Lehman effectively narrowed the gap between the local rich and poor without Ate Glue lifting a finger. Manny declined to say who are in this high net worth list. Just hope your ninong or boss is not among them.

Obama and Ate Glue

I am surprised that eminent journalist Amando Doronila, my friend and former journalism professor at UP, thinks just because Barack Obama didn’t return Ate Glue’s phone call and showed a disinclination to meet with her, he isn’t a friend of the Philippines. I think this view reveals an exaggerated sense of our importance in the overall scheme of global affairs. We have to grow up and not go into a tantrum for every imagined slight.

Given the horribly challenging items in Mr. Obama’s “to do” list, exchanging pleasantries with Ate Glue could hardly qualify as urgent. Sure, Obama talked for 30 minutes with French President Sarkozy and with other leaders of nations including those of South Korea and Japan and the following day with China. But each and every one of those nations is essential in dealing with current problems such as the need to reshape a new global financial system and move forward on the stubborn problems in the Middle East.

Of course we are not in Mr. Obama’s radar screen today. If we were, we would have reason to doubt his ability to sift the important concerns from those that can wait a little while. If he agreed to take every phone call from every world leader eager to report to their people that they had a chit chat with Mr. Obama, his focus on the critical issues would be lost.

There is nothing urgent in Philippine American relations today. The presence of American forces in Mindanao only bothers the extreme left. If the American troops are able to help our troops deal with the threat of terrorism in Basilan and Sulu, providing them bases from which to operate should be expected from us and should not be an issue.

As for trade issues, I don’t think the protectionist rhetoric of the Obama campaign will necessarily result in a loss of business for our BPO industry. In the end, the economics of offshore outsourcing will determine that. I doubt if our costs can be matched by onshore outsourcing in the US unless they are given fairly large tax breaks which the overburdened US Treasury cannot afford.

One thing is sure… Southeast Asia is a region that has to be close to Obama’s heart since he lived in Indonesia in his early years. Just because he can’t afford the time to say hello to our leaders doesn’t mean he is snubbing us. He just has more important things to do.

 Compassionate woman

Artemio Tipon sent me this joke for today.

An older man approaches a younger woman inside the mall. “Excuse me,” he said. “I’ve can’t seem to find my wife. Can you talk to me for a couple of minutes?”

The woman, feeling a bit of compassion for the old fellow, said, “Sure, sir, do you know where your wife might be?”

“I have no idea, but every time I talk to a woman with tits like yours, she usually appears out of nowhere.”

Boo Chanco’s e-mail address is [email protected]