Monday, 12 January 2009

Ten reasons why we should be happy in 2009

Joey Concepcion
The Philippine Star Business

Upon reading all the columns these days, there is nothing but bad news about 2009. Not that I disagree with many of the views, but I think things will be different. The Philippines will be far better than many other countries. Here are 10 reasons why I think we should be happy in 2009.

1 – We (Philippines, Inc.) have a unique business model, which is now more Service-based, through the export of manpower services and the migration of Filipinos to countries like America, Canada and countries in Europe. A lot of Filipinos continue to be one of the best performers in different industries, especially in the fields of medicine, construction, domestic service, among the many services provided. Many Filipinos, especially in America, take on two jobs and work very hard. Many of them even own the nursing homes in America. This is an industry wherein many Filipinos really excel. This strength comes from many generations of respect for elders. For example, the mano po tradition is still commonly practiced up to now. When a Pinoy eats, he never fails to say "Kain tayo!" and offers his food to be shared. These simple gestures show the many generations of respect. Our yayas who leave their families to take care of our own children are, in a way, traini ng for many who plan to go to Asian countries to do the same with higher pay. These OFW remittances will continue, which contributes to our GDP. In a way, this is the same as the oil that the Arabs have, or what durable products China has for exports to America. This is also now greatly affected as Americans have slowed down on consumption. Even though other countries, especially China, is well known for their export of hard goods, people will always have the option to put off buying furniture, toys, appliances or their other products. But, services are different because these are always needed. Our country's export of services via OFWs, call centers and BPOs is very unique. Compared to This service is hard to replace, as Filipinos have the passion to serve and a natural advantage in communications skills especially when abroad. Even here in our country, a call center operator would make 300 dollars a month. This is just equivalent to three days wage of an American working in a call center. With the crisis in their country, they would have to relocate here.

2 - In the years to come, we will be entering a low interest regime, with the Americans taking interest rates to almost zero. This will force other countries to lower interest rates. If Japan has had low interest rates for nearly 15 years and if America's economy will remain sluggish, we could be looking at low rates for quite some time. This can lead to our advantage. If our central bank will not lower rates, we may see a stronger peso this coming year or at the very least a much more stable peso. If interest rates are lowered, this will benefit a lot of entrepreneurs and would be also good for business. The peso may slide to the levels of 50, but this will also be good for the exporters, OFWs, call centers and BPOs.

3 - Oil has come down from the highs of 145 levels. As I have mentioned in my past columns, when oil was at that level, it was caused more by the hedge funds pushing oil beyond its real demand. Within two months, we have seen oil collapsed to a low of 30s. Now, it has recovered to high 40s. Assuming that oil would average between 50 and 60 for the year, this will still be a big boost for the tourism industry, as air travel will become cheaper. Our logistics cost in transporting products, being a country with seven thousand islands, will go down. The cost of power will go down, helping the consumers and the negosyantes with plants running at lower energy costs. This will also prevent an excessive conversion of farm lands to be used for alternative fuel, which should be discouraged. Instead, this option should be managed, so that irrigated and productive land will be used to make us self-sufficient in terms of producing rice.

4 - We will see inflation come down very fast. Commodities have come down, from the price of steel to raw materials and food like skimmed milk, wheat, oil, soybean, corn and others. By the beginning of the second quarter, when most of the companies that hedged would have been consumed, we should see prices come down. Another possibility would be no price increase this year. In fact, our company RFM has already reduced the price of our pasta. It is now one of the lowest in the market. Even our milk, hotdogs and corned beef are priced lower; as we are already taking some losses since the replacement cost have come down. This is going to be good news for the consumers.

5 – Philippine election spending will start early as usual. I expect this will be happening sometime midyear, as we will definitely have elections in 2010. The excitement of the 2010 elections will be felt very early. This spending should filter through the economy as early as the third quarter this year.

6 - Manny Pacquiao will beat Ricky Hatton. This will give the Filipinos greater pride. There will be more of the Collezione C2 shirts with the Philippine map to be worn by Filipinos, and less of the polo shirts. We will see a proliferation of proud Filipino shirts with the Philippine flag as its banner. All these lead to building the nationalistic spirit. This is also something that is very important to our country.

7 – The year 2009 will be the last full year of PGMA in office. I am not saying she has done a bad job. In fact, she has prepared well our country for the global financial crisis. This last year of her term, many of those running would want her to already finish her term. This year, we should see her stay in office, with less of impeachment noises. If we are able to weather this global crisis and PGMA is able to deliver economic growth, this will vindicate her as she finishes her term.

8 - The political drama will unfold. Many Filipinos look forward to this. Who will PGMA endorse as administration candidate? Who will Manny Villar pick as his running mate? Will Mar marry Korina? Will it be Loren or Chiz for president? Will Vilma Santos run for vice president?

9 - The world avoids a depression.

10 – GOD STILL LOVES THE PHILIPPINES.

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