"We need someone with enough brains, demonstrated through professional competence, whether in politics or business management"
It will be a long hard climb to economic recovery, not just for the Philippines, but the entire world.
And for us, there will be no quick fixes.
What are the pillars upon which most of the economy rests? Overseas contract workers, who are being repatriated by the thousands, the countries wherein they work also suffering from recession on account of the pandemic. Not only will there be additional jobless persons coming home, but as their families constitute the biggest drivers of consumption, you can only imagine the dip in consumer expenditures, and the impact on almost every aspect of the economy.
The BPOs or business process outsourcing companies is another. They are also dependent on the vagaries of the international economy. A lower volume of transactions means lower demand for outsourced help. As an aside, there are the POGOs -- Philippine Offshore Gaming Operators -- which are similar in operation to BPOs, except that most of the workers there are Chinese, just as their market is mostly Chinese. The dip, even the possible crash of that market is dependent on Xi Jinping, who is himself on a clean-up and austerity mode. The real estate boom in the country will then go bust. Right now, it is only on slow deflation, like a balloon whose tight string can no longer hold the air inside.
Since our manufacturing is tied to the supply chain of various countries around the world, our capability to supply finished or even intermediate goods is hampered. Even worse, with economies depressed, demand for our exports will likewise recede. With international trade down, so will many cargo vessels be dry-docked, meaning, for our seafarers, idleness on dry land.
International travel is not expected to rebound until 2024, as most travel experts, and even the International Air Travel Association (IATA) which counts most airlines as members, foresee. And that predicted timeframe is predicated on the widespread vaccination of populations around the world next year. Domestic travel is a function of the conquest of COVID-19, in turn a function of the discovery of an effective vaccine, and its proper distribution. Likewise iffy at this point in time.
Small- and medium-scale businesses are closing down, or have closed down. How their owners will be able to pay the loans they incurred will be an ongoing nightmare. How the employees retrenched will survive is an even worse nightmare for the macro-economy, just as destitution destroys the lives of millions. The corresponding impact on tax collection, the banking system, consumption, and even the big business conglomerates would be a huge problem.
Agriculture in the last quarter grew by 1.6 percent -- the only sector of the economy that slightly increased despite the pandemic. And fortunately, the department managing agriculture is now in good hands as far as top leadership is concerned. Still, there cannot be any quick fixes in agriculture, the way the sector has been neglected by successive leaderships for the last 15 years. Agricultural growth is hobbled by a lot of problems: small plots of land farmed by poor agrarian reform beneficiaries with little economies of scale, lack of access to inputs and financing of the same, CLOAs (Certificates of Land Ownership) which cannot be monetized as yet, lack of irrigation, even farm-to-market roads.
These problems have been there for decades, and solutions, though laid out by Secretary Dar, are not like magic wands. A rather perverse thought comes to mind: since the demand for OFWs and urban jobs will be down, maybe the children of our farmers will discover some redeeming value in farm work.
And then again, the very important sector upon which our food security rests has an unpredictable variable: Weather. And with climate change, that has become less and less predictable. A single strong typhoon can wipe out our palay harvest overnight.
As this is written, Sen. Ralph Recto is wondering aloud why newly harvested palay is selling for as low as P12 per kilo, when Thailand has restricted export sales, and Vietnam prices are rising steadily. If such reports are true, then our rice farmers are in for double, nay triple whammies since the rice tariffication law was enacted. Prices were so low last year when the government lifted quantitative restrictions, and more than 3 million tons were imported, a record high. But this year, even as the Bureau of Plant Industry issued import permits for 3.2 million, less than half has arrived, which only indicates a glut in the warehouses of the importers and traders.
Still, the pandemic erased practically every ton of rice in National Food Authority bodegas, as the Department of Social Welfare and Development and local governments used them up in the early months of the lockdown. Something does not compute.
This has been a rather sad article. As far as the economy is concerned, almost everything indicates a southward trend, but for the fact that our reserves are holding, boosted in value also because of the price of gold reserves. The peso is strong, but that is not by itself an indicator of economic strength, as many people think.
Our peso is strong because we are not importing the usual quantity of both consumer goods (look at our near-empty malls, and weep!); neither raw materials and factory supplies, because manufacturing is down.
It is the law of supply and demand at work in our strong peso: very little demand and plenty of foreign exchange reserves, yet. But next year, expect OFW remittances to go down. And yet, whatever economic recovery we can cobble will require importing more than the present.
Which brings me to comment on what Speaker Bebot Alvarez controversially said in a Tagum interview a week or so ago: that we (the electorate) have to be wiser when we choose the next president less than two years from now.
“Dili kanang paisog-isog. Kinahanglan naa’y utok”, which simply translates into choosing someone who can present the right solutions. Surely, there will be nor quick fixes. And Jack Ma, who claims to be some senator’s good friend, cannot save us by giving freebies to the poor. What we will need is someone with enough brains, demonstrated through professional competence, whether in politics or business management. Someone with a real road map, and will tell us the truth, no matter how painful, for as long as the map provides hope.
Amen to that!