Cebu biz sector positive US to evade fiscal cliff

CEBU, Philippines - Considering the United States as the Philippines’ biggest trading partner, local business leaders remained buoyant that the foreign country could evade fiscal cliff and the much worse economic recession that may affect the local economy and other international markets if not promptly resolved.

Last January 2, the fiscal cliff bill passed on a bipartisan 257-167 vote in the US Congress to avoid a national fiscal cliff of middle-class tax increases and government spending cuts which had been scheduled to take effect with the new year.

Earlier reports cited that US President Barack Obama described such agreement as the “right thing” to do for the country and the House should pass it “without delay”.

"This agreement will also grow the economy and shrink our deficits in a balanced way — by investing in our middle class, and by asking the wealthy to pay a little more," Obama said in a statement.

The measure raises tax rates on incomes over $400,000 for individuals and $450,000 for couples which was higher than the thresholds of $200 000 and $250 000 that Obama has campaigned for.

Cebu Chamber of Commerce and Industry President Prudencio Gesta expressed hope that the US economic recovery trend shall continue which could also benefit the local economy.

“We are glad to know that the US government averted what they call economic calamity when US lawmakers approved the deal not to increase taxes substantially and spending cut. Otherwise, this could bring US economy to recession that may also impact our transactions and employment to Filipinos working there,” he stated.

Mandaue Chamber of Commerce and Industry President Philip Tan, on the other hand, said that countries with good fiscal policies in place will be able to survive the short-term transition of belt tightening by US and most European countries.

“The world economy will always be influenced in American and European work business environments. Deficit spending is a thing of the past. Our Central Bank seems to be in the right direction as well,” he continued.

He added that Overseas Filipino Workers should be commended for their contributions to help the local economy survive over the years.

Rey Calooy, head of Filipino Cebuano Business Club Inc., described US to be very “optimistic, innovative and objective” when it comes to their economy.

He added that all countries have been eyeing US as a model economy so the latter is careful not to let them down “or else, the whole world will be affected”.

“US knows how to play the game and how to maneuver so as not to result to recession. They could make it avoid the fiscal cliff,” he stated.

Meanwhile, he cited that the Philippines could focus on establishing business partnerships with Asian countries as alternative.

He further noted that China, in particular, is an emerging trading partner with the country since the Philippines is rich of its mineral resources.

China, on the other hand, as one of the world’s largest manufacturers needs to import raw materials especially from its neighbor countries for its production.

Asked if the countries’ dispute over Spratly Islands could affect such negotiation, Calooy clarified that business dealings and political conflicts are two different issues. (FREEMAN)