I may complain about the traffic nowadays, but I remind myself that this is a good problem to have.
We are bouncing back after one of the darkest chapters in our history, and we should be glad for it. Every Christmas after 2020 is a hard-earned Christmas, and I will tell you why.
In August 2021, the Philippines was reporting more than 10,000 NEW Covid cases daily. By that time, hundreds of people were dying from Covid every day, and we haven’t been able to vaccinate more than 10 percent of the population. The provinces were also feeling the effects as travel restrictions prevented people from going on vacations and goods weren’t moving as freely as they did. Conferences were canceled, as well as revenue-generating festivals.
On the advice of experts from OCTA Research, I pushed for a two-week lockdown in the National Capital Region in the middle of August to curb the rise in cases and head off the deadlier Delta variant of Covid. Thankfully, the government listened and had the political will to implement what must have been a difficult decision. The Philippines was already gaining unwanted attention for having one of the world’s strictest and longest pandemic-caused lockdowns, and here we were, pushing for even stricter mobility restrictions in the National Capital Region, the heart of business and commercial activity in the country.
I was not spared from criticism for pushing for the two-week lockdown, but I trusted the science which argued that this short-term inconvenience would result in long-term gains. If we locked down in August, we can look forward to a Christmas where Filipinos could freely go about their holiday.
And we did.
I say this to put some perspective on how far we’ve come. The progress made since the challenging times of 2020 is remarkable. If analysts are correct in their projections, 2023 might also deliver even higher spending numbers.
Consumer spending is important to small businesses and it is important to governments. It feeds on consumers’ confidence that there is more income to come and that the rise in prices is still manageable.
Consumer spending plays a vital role in economies like the Philippines, where domestic consumption accounts for a significant portion of the GDP. It serves as a powerful engine that drives economic growth, job creation and overall prosperity.
It also directly impacts businesses, especially MSMEs. They are the backbone of the Philippine economy, comprising a significant portion of the country’s business landscape. When consumers have confidence in their financial situation and the overall economic climate, they are more likely to spend on goods and services. This increased demand stimulates business activities, encourages production and ultimately leads to the growth of MSMEs. In turn, thriving businesses can expand, hire more employees and contribute to the overall employment rate.
Consumer spending also generates income and supports livelihoods. When consumers spend their hard-earned money, it creates a ripple effect throughout the economy. When individuals purchase goods or services, it generates revenue for the businesses selling those products. These businesses, in turn, pay wages to their employees, who then have the means to make purchases. This cycle of income generation and spending helps to sustain livelihoods and improve the standard of living for individuals and families.
Moreover, consumer spending is closely linked to investment and economic stability. When consumers have confidence in the economy, they are more likely to make long-term investments, such as buying properties or starting businesses. These investments not only create wealth for individuals but also contribute to the growth and stability of the economy as a whole.
Consumer spending helps to stabilize the economy during times of economic downturn. During periods of recession or slowdown, increased consumer spending can stimulate demand, prevent further economic decline and pave the way for recovery.
Consumer spending also has a multiplier effect on the economy. When individuals spend money, it not only supports the business they are directly transacting with but also has indirect effects on other sectors. For example, increased consumer spending on retail products leads to higher demand for manufacturing and logistics services, creating more job opportunities in those sectors. This multiplier effect creates a positive cycle of economic activity, leading to increased income, tax revenues and overall economic growth.
Recognizing the importance of consumer spending and fostering an environment of confidence and financial security is key to sustaining economic progress and improving the overall well-being of every Filipino.
Take away that confidence and you have a population of scared, anxious consumers holding on to every centavo.
This fear and anxiety has consequences beyond the individual consumer. With fewer people going out and spending their money, businesses will be forced to close down and employees will lose their jobs. Imagine an entire commercial district of shuttered shops and communities of jobless individuals. It can’t be that hard to imagine because we lived that reality not a scant three years ago.
It is the entrepreneur in me that props up the eternal optimist, and vice-versa. The entrepreneur in me recognizes the importance of consumer confidence and spending for the prosperity of businesses and communities. Conversely, my optimism fuels my entrepreneurial spirit, driving me to seek opportunities for growth and progress. As an entrepreneur, one must have a certain allowance for risk, but it must always be tempered by clear, dispassionate thinking.
This is why I keep telling people to not get carried away by negativity, in the news, on social media, by the loud voices who keep warning that the sky is falling. It is like having a lockdown all over again, only this time we have only ourselves – and not a virus – to blame.