It may not hit us hard, but we might as well be ready

If you still have doubts that the financial crunch has hit our shores, just check out the malls all over the metropolis. They are positively teeming with people, all furiously shopping for Christmas gifts. The malls, and the supermarkets, are raking it in.

And why not? It’s the Christmas season.

It’s still the subject of serious debates. Are we going to be hit hard by the financial melt down? Our economists say it is impossible not to get hit, not when the big countries are already reeling, and all of them have a direct impact on our economy. Our business leaders concede that we would feel the pinch by next year. Just how hard remains the big question.

We polled (informally) some of our business leaders and this seems to be the consensus when they gave their forecasts for next year. While they unanimously conceded some slowdown, they were all surprisingly optimistic about 2009. One of them repeatedly said “cautiously optimistic”, a euphemism that didn’t sound optimistic at all, but there is a general sense of relief that the crunch may be long in coming, unlike our big neighbors, and when the time comes, we may be quite prepared for it.

Ed Lacson, currently the president of the Philippine Chamber of Commerce and Industry (PCCI), is in the shipping business, and he isn’t too optimistic about the prospects that the industry faces next year. “The shipping industry is cyclical... we just have to brace ourselves.” I guess that is to be expected because with the global slowdown, there is less volume for their ships to carry”.

As for PCCI’s thrust for next year, Ed says they are strongly pushing for a return to basics - agriculture, food, education. These are the factors that could spell survival as well as make us globally competitive.

PCCI’s Chair Miguel Varela also says, “Of course we will not be spared from the financial crisis. It will catch up with us next year, but I’m confident that the economic fundamentals which were laid out this year will help us control this very difficult situation. I see that there are certain vulnerable sectors like the electronics export which comprise 50 percent of our total export.” But, he hastens to add, “I don’t think it’s going to be a recession.”

Mr. Varela also said that according to the figures of the Dept. of Labor and Employment (DOLE), some 500,000 of our “kababayans” stand to be displaced.

The PCCI, incidentally, wants to develop more livelihood programs for these displaced OFWs.

On the utilities and energy sector - more gloomy news. Just when we were starting to lay back and enjoy the price rollbacks on fuel, Mr. Jose Alejandro, VP for Utilities and Energy of the PCCI says that once the US economy starts to pick up again, the price of oil will definitely go up. The Arabs are definitely not comfortable with the current prices, and while their scaled down production has not driven the prices up, the increased demand when the US economy (and those of the other countries as well) improves definitely will. The OPEC countries are comfortable, according to him, at $70/barrel.

As for the power rates, these will go up only if affected by foreign exchange. Corollary to this, he strongly advises the government sector “to accelerate the privatization of power plants to offset the crisis that we are facing.”

As for renewable energy, the vote is a resounding Yes!, but he cautions that this is a long term program, and we’re looking at ten, even twenty years to develop it. And there is quite an array to choose from - hydro, wind, geothermal, etc. Which one are we keen on developing?

With the second highest power rates in the region (next to Japan), Mr. Alejandro strongly suggests that government review all applications for privatization, all existing royalties provisions, all pertinent PSALM provisions, etc. “When there’s true competition, things will go down,” according to him.

For the export sector – Mr. Sergio Luis Ortiz predicts a growth rate of three to five percent for merchandize export. They are targeting five percent to seven percent growth by next year and emphatically says, “We will not be negative.” They report that they have opened new markets in India and Australia.

For the cement makers, Mr. Ernesto Ordonez is still fuming about the scrapping of the five percent tariff which, by the way is on a trial basis of six months only. To this, Mr. Ordonez says “Even during the six months – we want it reviewed...we want this as short as possible”, obviously to avoid the dangers of dumping cheap or sub-standard cement by other countries into our local markets. His forecasts for the cement industry for 2009 are hinged on the final verdict on the cement tariff.

As for minerals industry, Mr. Benjamin Romualdez, president of the Philippine Chamber of Mines, reported that 2007 and 2008 were banner years for the industry. However, in the last quarter of the year, the prices of metals which we have been predominantly exporting have gone down significantly. Copper is down by 50 percent, and nickel down by 80 percent. It looks like this trend will be carried towards the early part of 2009, so projections are not very good. Gold, though, is still as strong as ever and the outlook and projections for gold producers remain upbeat.

Mr. Romualdez adds that “We need many skilled workers- geologists, mining engineers, geodetic engineers, etc. this type of workers we welcome and need.” That should be good news to our new graduates in this field.

There are more fearless forecasts from our business leaders, by next issue.

In the meantime, do slow down on your frenetic shopping. Often times, we buy more than we need, or buy stuff we can’t use. Whatever forecasts we have, whoever dishes them out, the verdict seems to point to only one conclusion. We are going to be hit, somehow, some time next year. Just how hard, nobody is willing to venture an educated guess. It’s always best to exercise caution. And in this season of plenty, moderation should still rule.

Memories...memories

Childhood games of bygone years are what Mr. Lando Fernandez of Sampaloc, Manila would like to share with our readers this week.

“There was the tumbang preso, which was a very popular street game among kids then who haven’t even dreamt of gameboys or playstations. All they need was an empty tin can, preferably the small size milk can and their Japanese rubber slippers for pamato and that can be a whole afternoon gone amidst laughter and also competition.

There was also the team game of patintero usually played in the early evenings and sometimes even up to the nighttime when the moon is full and can adequately illuminate what were then poorly lit streets.”

Got some memories of the good bygone years? Why don’t you share them by writing to us?        

Merry Christmas to all.

Mabuhay!!! Be proud to be Filipino.

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