Saga of survival continues

It has been a tempestuous year — both in terms of the nation’s political as well as economic life. Political bickering revolving around the Hello Garci electoral fraud issue had consequently restrained economic growth at a most difficult time when tax reforms were being imposed and oil product prices were on the rise.

The saga of survival of this administration continues with the succession of good things that seems to have taken hold these past weeks. For one, the peso exchange rate against the dollar continued to perform exceedingly well. (Incidentally, this movement is inversely proportional to the popularity rating of President Arroyo, which is a puzzle to many.)

Buoyed by more than $11 billion in remittances from the more than eight million Filipinos toiling overseas, the peso has gone back to the P53 level compared to P56 during the height of the Hello Garci controversy. No wonder it is Asia’s best performing currency today.

We should be grateful for the momentum that the strong peso had been injecting to the economy. At the very least, it has helped keep the benchmark 91-day Treasury bill rate at a low single-digit level of 5.146 percent.

Inflation had been tempered at seven percent in November, aided by the temporary drop in world oil prices. This again countered initial apprehension that prices of consumer products and goods would rise exponentially and leave the economy badly battered.

Employment nationwide rose to 32.9 million as of end-October this year from 31.7 million recorded in the same period in 2004. The generation of 1.1 million jobs alone in October — the highest net increment recorded in 2005, according to the labor department – is helping stabilize what could otherwise have been a volatile social environment.

Hurdling the fiscal deficit

The expanded VAT, which finally took effect on Nov. 1, calmed down foreign rating agencies who were threatening to hand down another downgrade without additional revenues from the widened sales tax net.

Local businesses believe that the VAT will solve the budgetary deficit – considered the single-biggest problem hounding the economy – and are likewise more optimistic. They continue to regard the expanded VAT as the key to finally turning the economy around.

In 2005, economic planners believed they were able to contain the budget gap at about P161 billion or almost P20 billion lower than the projected P180-billion ceiling. The goal is to bring down the fiscal gap to zero by 2010, if not earlier.

Solving the deficit problem will immensely please the rating agencies, something that may prompt them to consider an upgrade next year. An upgrade will mean lower interest on our loans, definitely something that could reduce the strain that the deficit has been causing the Philippine economy.

Economic slowdown

What is harder to tweak is the solid economic numbers. Despite strong consumption fueled by OFW money and the sustained strength of the services sector especially telecoms, the country’s gross domestic product grew only 4.1 percent in the third quarter against the government’s target of five percent.

This bleak scenario is echoed by a government statement that announced that GDP growth this year would likely fall below the 5.3-percent target.

Exports have as well slowed down and the initial estimates are already indicating that the government will not meet its double-digit export value target this year.

The agriculture sector similarly exhibited a rather lackluster performance in 2005. But despite the slack growth in the farm sector this year, it still provided jobs to many Filipinos, along with the services and industry sectors.

After weighing both positive and negative indicators, we end the year still concerned about the biggest hurdle that the nation faces in the coming year – the threat of an economic slowdown. We’ll discuss the challenging prospects of the year 2006 next week.

At this point, my family and I would like to wish everyone a Happy New Year. In the coming year, we may need all the luck we can get.

Poker popularity surges

The local poker circle was abuzz with activities during the month of December capping what has been a very active year for poker enthusiasts. The frenzy of non-wager poker tournaments started in April this year with the launching of the Poker King Challenge Series by the Poker Club of the Philippines in partnership with the Philippine Gaming & Amusement Corp. (Pagcor), the country’s gaming authority.

Airport Casino Filipino Parañaque headed by senior branch manager Rogelio "JB" Bangsil Jr. earned the distinction of organizing and holding the biggest Texas Hold’em tournament for the year that attracted 115 participants. The promotion of the tournament was so effective that 18 of the participants were foreign-based poker players. This shows that at this early stage, the Philippines is starting to be noticed by world-class poker tournament players.

The major prizewinners of the 1st Airport Casino Filipino Hold’em tournament – Ben Chim (grand champion), and Dennis Gamboa and Enrique Primicias (runners-up) — were commended by Bangsil for their spirited and intense plays during the colorful awarding ceremonies held right after the grueling 12-hour skills competition.

The Poker Club of the Philippines, on the other hand, marked the club’s year-round activities with Christmas cocktails and a special no-limit Hold’em tournament held at Valle Verde Country Club won by Atty. Oliver Zorilla who took home the P30,000 grand prize. It was, indeed, a fitting climax to the first full-year operation of the club.

To all poker players, may the New Year bring more favorable "flops," more positive "turns," and less dampening "rivers."

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at reydgamboa@yahoo.com or at reygamboa@linkedge.biz. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.