More than two years ago, sometime in September of 2005 I saved this article from the Philippine Daily Inquirer entitled “’5% growth or worse ‘Forecast of economic ‘collapse’ in 2 to 3 years chills businessmen” I saved the article in my computer because I wanted to know if the future projections of the business environment in our country will come to pass.
In this article, according to economic analyst Peter Wallace “There is a 60% to 70% chance the Philippine economy will experience “modest growth” as it struggles with rising global oil prices and internal political uncertainties” He continues that if President Gloria Macapagal-Arroyo fails to carry out tough fiscal reforms and change her leadership style, the country is “heading towards a recession” or prolonged economic slowdown.
Now that two years has actually passed, businessmen can take a breather because the analysis of Peter Wallace did not seem to take place. We did not just experience modest growth, we experienced tremendous growth. The peso is nominated as one of the best performing currency in Asia and is at its strongest as against the U.S dollar. Gross domestic product growth has exceeded its target, the Philippine stock market is at its peak performance, Inflation is at its lowest and our own Central bank has reserves more than what is required by international standards. The government has so much money that our budget for 2008 has exceeded the trillion peso mark. We have seen tremendous growth in the amount of money that Overseas Filipino workers have sent to our country. The department of tourism has exceeded its target number of visitors. Even the export sector who is said to be experiencing a slowdown in growth because of a stronger peso has still reported a positive growth due to the rise of Business Process Outsourcing in the country. Our economic fundamentals are strong. The President has implemented excellent fiscal reforms although it has been said that she could have done better, however in totality she has done a good job this year. Truly this year has been a great year for the Philippines in terms of economic growth, which of course makes it good for business.
With regards to politics, political bickering is still present albeit the people’s response to it is not as intense as before. There are some attempts by some prominent personalities to get involve in political adventurism but it has not captured the public’s attention. The Filipino people are sick and tired of the political drama being played out almost every year by our leaders. This is evidenced by the apathy exhibited by the public with regards to calls for the president to step down. The people are more interested in action, the action of economic growth. However despite this, we still have not achieved the level of political maturity that most industrialized countries have attained.
On the global level, the markets are said to be in “disarray.” A weak U.S economy due to the sub-prime mortgage problem has began to affect the rest of the world markets. However, economies such as ours, which has “taken advantage” of the weakness of the U.S economy has somewhat emerged as the winners in this economic tug of war. Economies of the European Union and Asia are seen to be the ones that are benefiting from a weak U.S economy. The price of oil has also gone up to its highest levels. This has caused some price increase in local oil prices and in return has caused prices of basic commodities to go up. However the rise in prices has softened and has been cushioned a little bit due to a strong peso.
On the local scene, Cebu has continued to sustain its growth. This is one place in the Philippines where you can truly feel the economic boom. If you drive around the cities and the provinces, you can see that there are several building constructions going on. New hotels, malls and subdivisions are sprouting all over the place. People are buying real estate in Cebu as is the rest of the country. More call centers and other business process outsourcing businesses are opening. Cebu’s economic growth is also fueled by the mining industry as one the biggest mining firms in the country, Atlas mining, is currently in the process of opening up.
With regards to local politics and other issues, the same political families still rule most of Cebu, although there is changes in power in some places especially the Northern part of Cebu. Some political families have lost several territories while others have expanded their territory to almost include most of the province. The current governor and Cebu City mayor had several clashes in the early and middle part of the year. But this has been lessened as the year is coming to an end. Extra-judicial killings have also halted as the year is coming to an end. Several issues have however hounded the judiciary such as the marriage scam, the T.R.O for sale scam and recently the annulment scam, wherein several judges has been suspended. The issue that is brewing right now is the issue with regards to the oil exploration in Tañon strait.
On a more personal level, our own business ventures although achieving a plateau in terms of income, however we are still thankful to the Lord that we have survived and that we have gotten a stronger grip of our finances. Although the rising cost of doing business has been somewhat cushioned by a stronger peso, nevertheless the cost of doing business still continues to increase. Together with my management team, we have made some major changes in terms of systems improvements, implemented budget cuts, undertaken organizational overhaul, and implemented policy changes in the companies that we are handling. We have learned to run our businesses with the vision statement in mind and the mission statement in our hearts. By God’s grace we are also seeing the development of a more formidable management team.
If there is one word that defines the year 2007, that word is “GROWTH.” Everywhere you see growth, in the economy, political scenery, social issues, in our business, profession, work and even in my own personal life. I am thankful to the Lord for giving us all these blessing of being able to move forward in almost every aspect of our lives. I don’t know what next year will bring, but I do hope it will continue to bring more growth not only in business but in everything. I could only speculate as to what God has in store for us next year. That will be the subject my post next week, the 2008 business forecast. Stay tuned!