Where do we begin? What assumptions do we make? What kind of surprises should we prepare for? We ask these and other questions as if anyone really has the answers. But we try to have them answered anyway, hoping that maybe, someone somewhere stumbles upon plausible insights of how things might turn out to be next year.
One large conglomerate started off its annual planning season by inviting Romy Bernardo, former Finance Usec and IMF bureaucrat to attempt to paint a picture of how things might be next year. I listened to the almost hour long presentation and the conclusion is, hold your breath, more of the same.
This means, Romy explained, expect consumption driven growth with export expansion dependent on world events. Investments are likely to remain anemic. Romy is particularly worried about "increased investment risk brought about by ongoing reviews of existing B-O-T contracts."
The fiscal sector will remain the weak link, Romy predicts. It helps, he said, that the new BIR Chief is systems oriented. Based on his experience working with him, Romy thinks Willy Parayno will be able to deliver what Rene Bañez failed to collect. But he is not ready to bet on it.
"Unfortunately, fiscal weakness, coupled with a low savings rate and dependence on foreign savings subjects the economy to the whims of the market. The destabilizing impact of shifts in emerging market sentiments is clearly undesirable."
In plain language, Romy is worried we could fall victim to a contagion effect from an economic crisis in a Latin American country or even from within the region. We know what that means. Banks and investors panic and quickly withdraw funds, as in the 1997 Asian economic crisis. Because our government’s cash position is low and so is our savings rate, we borrow heavily abroad. There lies our vulnerability to an international economic panic.
As always, Romy said we can expect OFWs to help stabilize income and job needs of the population which our domestic economy can’t provide. Trade liberalization, on the other hand, will help stabilize price and wage demands. Romy is also worried about our banking sector. And he thinks it is unfortunate that government’s weak finances make it almost impossible for it to help "another weak point in the economy."
Romy estimates the recapitalization needs of our banking sector at about four percent of GDP this year. "Were government’s fiscal position in better shape, it could take firmer action to help banks clean up bad assets and put them back into financial health so they can perform financial intermediation."
Asked how he would describe himself philosophically as an economist, Romy replied that he is to the left of Bernie Villegas and to the right of Lucio Tan. He isn’t bubbling with optimism as Bernie is nor is he as pessimistic as the taipan who recently told reporters not to expect anything for the Philippines in the next 100 years.
If you survive Romy’s briefing without getting a migraine, you will realize that all he said was, prepare to muddle through in 2003 with a chance of real inclement weather depending on developments abroad. That means for you corporate planners, little or no capex budget for most and cut the opex budget to the bone with its attendant job losses due to right sizing.
And I assure you folks, that Romy Bernardo did his best to be upbeat!
The same thing with that PIATCO scandal. Why focus on alleged ulterior motives of Ms. Gloria Tan Climaco? Assuming she does have ulterior motives, she raised valid questions on the overpriced passenger and other users fees, the open-ended loan guarantees of government among other questions. The Chengs have also not answered where the supposed PR money was really spent on by their consultant, Alfonso Liongson.
Stop the character assassinations. Just answer the questions. Was the Macapagal Highway contract overpriced? Are the ARCA amendments to the PIATCO contracts onerous and disadvantageous to the government and the Filipino people.
Everything else should be irrelevant, at least for the moment.
The club manager was presented with a marriage contract to prove that the two are legitimately married to each other abroad. It was also pointed out to the club manager that the by-laws of the club only said spouse and didn’t specify the sex. So what’s the problem?
It seems that our country’s laws specify that a man can only be married to a woman. And much as the manager wanted to be in tune with the changing times, his legal counsel warned that there could be legal consequences. Other club members can sue, if they are uncomfortable with the arrangements.
I only had one question for the manager: what door will the "wife" use to go to the gym showers, dressing and sauna rooms? Well, men’s of course. The "wife" assuming one of the two blokes can be called the "wife" in this set-up, still has a penis attached to his body, not a vagina.
I am normally very liberal about changing social mores. I also realize it is not politically correct to be homophobic. But for now, throw me my towel, quick!
The light signals back, "Change your course 10 degrees west."
Angry, the captain signals back: "I’m a navy captain! Change your course, sir."
"I’m a seaman second class," came the reply. "Change your course, sir."
Now the captain was furious. "I’m a battleship! I’m not changing course."
There’s one last reply. "I’m a lighthouse. Your call."
(Boo Chanco’s e-mail address is bchanco@bayantel.com.ph)