No 'oks' year

There is a solar eclipse today, the first day of the Lunar New Year. Bad omen for the Year of the Ox, according to our resident Tsinoy. But then we don’t need a solar eclipse to tell us this isn’t going to be a bull year.

The news yesterday continued to be bad, with cement giant Holcim announcing the shutdown of its Philippine plant for six weeks due to weak demand, and the workers’ union in the National Food Authority complaining that 800 employees would lose their jobs.

But it’s not all bad news. We still see want ads, announcing openings mostly in call centers and the information technology sector. Foreign companies are still recruiting Filipinos for jobs overseas.

At the mall nearest to my home over the weekend, the Jollibee outlet was full, though I noticed that several outlets selling pricier food had closed shop.

The pattern tracks the shift in global consumption habits, with discount retailers seeing their sales rise while luxury brands are bleeding.

For this year at least, consumers will be cutting back on luxe and putting off travel and certain purchases, such as new cars or computers to replace old ones. People are making do with what they have.

Obviously certain sectors will be hit harder: automotives, real estate and construction, travel and tourism and related industries.

For the first time, for example, the World Association of Newspapers and the World Editors Forum, representing 18,000 newspapers and media institutions, have cancelled their annual gathering, scheduled in March in the Indian city of Hyderabad, for lack of participants.

The WAN/WEF attendance last year in Sweden’s port city of Gothenburg was a record high 1,800 – but that was in June, shortly before oil exporters became giddy with the prospect of $200-a-barrel crude.

Today, with crude prices plummeting to a record low of below $34 a barrel this month, economists are worried that the price has fallen beyond comfortable levels.

The price of crude, pushed down by tepid demand, has become just another depressing indicator of how bad the Year of the Ox is going to be. As Filipinos like to say, it’s not going to be “oks na oks” at all.

But we can’t spend the year moping and feeling sorry for the end of the good times. We have to do what we can to speed up recovery. Most of the prescriptions boil down to this: be prudent with your money, but continue spending to stimulate the economy.

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The government has prepared a pump-priming package. Our major banks, meanwhile, have been conservative and prudent in credit and investment policies, avoiding those exotic financial instruments that have turned out to be backed by little more than air, so they don’t need reminders about the responsible mobilization of money.

There is a continuing debate on how much government intervention in failed private enterprises capitalism can bear before it ceases to become capitalism. Members of the US porn industry weren’t just out for publicity when they demanded a bailout from Washington similar to those for the automotive and railway industries. Where does one draw the line?

But this is also not a problem confronting our government. What is a problem is the loss of jobs. The Department of Labor and Employment itself is painting a grim picture, noting that since December alone, 15,000 jobs have been lost.

Among the first to downsize, shut down or suspend their Philippine operations were some of the largest US companies such as Texas Instruments, Intel and Microsoft.

Labor officials estimate that an average of 100 Filipinos are losing their jobs every day in this downturn.

Companies that had planned to shut down last year put off their plans until after Christmas, so the jobless figures could be highest in the first quarter and then taper off. By May, we should have a good idea of the trend for the year.

So far we have seen no mass return of Filipinos sent home from work overseas, except for a few batches from Taiwan. Many of our OFWs are in the service sector, which economists believe can withstand the downturn.

That should be good news for our retail industry, which has enjoyed an unprecedented boom for a few decades now, thanks in part to the greater spending power of OFWs and their families back home.

The OFWs have also been a boon to real estate, household electronics and the automotive industry. If their purchasing power weakens, the economy will feel it.

This brings us to the common prescription for all ailing economies: local consumption must be encouraged to keep production going and save or even create jobs.

How to encourage local consumption in a downturn is a matter of debate and innovation. Some economists are proposing an increase in wages to stimulate consumption – something that will likely be greeted with a resounding no by most Philippine employers.

China, as I have written, has devised a subsidy scheme under which its citizens are being encouraged to buy, buy, buy. As export markets contract, China is among the most vulnerable. Its 1.2 billion people will have to take up the slack in global demand to absorb all those products made in China as well as imported goods. For the world, a weakening of Chinese purchasing power is also bad news.

In our country, entrepreneurship can be encouraged through assistance from the government in obtaining credit, technical support and marketing. Developers may want to do their part by bringing down store space lease rates. This is one of the things that disheartens any budding entrepreneur in this country, because you could end up working your butt off and making money only for the lessor.

It’s not going to be a year of the bulls, but we can survive the crisis by borrowing the traits associated with the ox: strength, tenacity, and a readiness to do a lot of hard work.

To borrow a phrase from Hollywood movie mogul Samuel Goldwyn, the harder we work, the luckier we will get.

Kung hei fat choi!