As is the practice of the Bangko Sentral, they just concluded their survey of the business outlook for the fourth quarter of the year, and as expected by many, our local businessmen find the landscape rather grim and gloomy, more in the context of the global economy than anything else.
Of those polled, 18 percent belonged to the big business sector, 33 percent to the medium-sized and 36 percent to small enterprises. Though the business confidence improved by 6.1 percent (quarter on quarter), much of this should be credited to the softening oil prices globally which trickled down to us. The big players still have to reflect the true global oil prices in the pumps, but I guess we’re getting there. Very slowly.
Notwithstanding this, our businessmen are still pessimistic, expecting the local economy to feel the global pinch by the first quarter of next year. They cite low export, the decline in consumer demand, and the depreciated peso as the main reasons, aggravated by unusually high political noises in the home front.
The survey looked at exporters and importers with much significance, and it is interesting to note that there is less pessimism in the areas outside of the National Capital Region, with the exporters registering the highest pessimism, as expected. Regions 1 and 4 where products are mostly agricultural and serving the domestic market, rated very low, while Regions 7 and 11 posted a positive rating. This is not surprising because it is these regions that export furniture and Christmas décor. Both still enjoy a healthy market abroad, despite the financial crisis.
In other areas like the service sector and construction, the index remained positive. This is evident in the unrelenting construction we have all over, from Makati to Quezon City, from Luzon to Palawan, though we noted a slowing down here too. The hotel and restaurant sector was positive as well, and this can be attributed to the seasonal demand this Christmas. Traditionally, the fourth quarter survey always brings a more positive note because of the Yuletide season when most people are expected to spend and splurge a little, and the remittances from our OFWs easily double or triple as December comes. But this year, the index does not seem too happy.
As expected, industry and trade remained negative because of low consumer demand, and while many businesses indicated that they have expansion plans for 2009, it is mostly focused on capital investments. They do not expect to hire more people for 2009. Bad news for our new graduates.
So how do our businessmen look at the coming year? Bad. The consensus is, come 2009, the peso will further weaken, we will have a higher inflation rate, and the interest rates will soar.
I don’t really enjoy being a harbinger of bad news, but even the coconut industry is not doing as well as the United Coconut Association of the Philippines expected. Newspaper reports have it that our coco exports took a beating in August of this year, down 42 percent from last year. But according to our coconut authorities, our exports of copra reached 1.160 million tons from January to August, up by 15 percent from last year. Our revenue exceeded the P1 billion mark for the 4th time, and this year, the coconut industry sees a good year, except for the month of August.
The major export markets are still the United States, the European Union, Japan, China, Malaysia, Korea and Indonesia. For the US and European markets, our coconut oil, copra meal, desiccated coconut, virgin coconut oil and oleo chemicals exports are hale and robust. The other coco products like coconut water and coir fiber, though still a constant, do not have hefty volumes. In the past, no one thought of exporting these-they were treated as by-products and counted as waste.
Did you know that we are no longer the No. 1 producer of coconut in the world? We have been overtaken by Indonesia which is now No.1, but the Philippines is currently the No. 1 supplier of coconut oil, desiccated coconut and oleo chemicals from coconut oil. And Indonesia, the top producer, is one of our top export markets. I hope I don’t see the day when it overtakes us here as well.
The problem of the coconut industry is we need more coconuts. The farmers need more incentives to grow coconuts, and while the government has provided these through the Coconut Authority, less and less farmers are into traditional growing. More than 50 percent of our coconuts come from Mindanao, but the rest of the country is slowly shifting out of coconuts. Technologically, however, we seem to be doing very well with our oleo chemicals (fatty alcohol, glycerin, bio-diesel, etc.). Let’s work on this. With due diligence, and the right partnership between the private sector and the government, we could be the recognized leader in this field, not only in Asia but in the world as well. Let’s not wake up one day to realize that we need to import coconuts from our neighbors, like we did rice.
Mail call
Thought I’d give some space to our readers for their reactions.
From Jay Michael Jaboneta- “Thanks for the great article entitled Despite the global mess, maybe we can pull it.” It is an eye-opener and refreshing take on what happening to the global financial markets these days. But where I believe the media can play a role is in writing more about successful stories and the bright spots in the global/Philippine economy. Part of the malaise that is happening today is due to too much negativity in the media especially in the US regarding what happened. I believe its time to move on and focus on the solutions, creative solutions at that. And maybe optimism will bring renewed confidence in the markets. My two cents worth.”
From Aldrin B. Concepcion of Poly Propylene, Saudi Kayan Petrochemical Co.-” ...sabi nila ang mga OFW daw ang “bagong bayani” ng ating bayan...ano na ba o may binuo na bang solid na plano ang ating pamahalaan para tulungan ang sinasabi nilang mga “bagong bayani” na ngayon ay sila naman ang nangangailangan ng tulong mula sa Gobyerno? Nabasa ko sa isan articulo sa internet ne naglaan sila ng Php250M para tulunganang OFW ns mawawalan ng trabaho sa ibang bansa (bakit gaoon kaliit)....Sigurado kayang magagamit ito ng tama? Baka naman kung sang bulsa lang ito mapunta?
...Ngayong kaming mga OFW ang nangangailangan ng tulong at sana hindi kami magaya sa mga naunang bayani na kung kailan mga wala na ay saka pinagtuunan ng pansin. Hindi po ako anti-government..Simpleng OFW lang po.”
Thanks so much for your inputs.
We will resume with Memories..and more next week.
Mabuhay!!! Be proud to be a Filipino.
For comments: (e-mail) businessleisure-star@stv.com.ph