MANILA, September 12, 2003 (STAR) DEMAND AND SUPPLY By Boo Chanco  - A UP economist told a group of private sector managers the other day that he hopes for an economic turnaround but could not rule out a recession in late 2003 if the political situation deteriorates further. Prof. Emmanuel de Dios, one of the country’s more respected economists, underscored the negative impact of what he called our country’s politics of attrition on our economy. (He was a student of Ate Glo at the Ateneo but moved up to UP for his graduate degrees.)

The economy, he said, has shown signs of weakness in the last six months. Growth was below target, agriculture production was affected by adverse weather, public construction was significantly down due to the budget deficit, overall government consumption was also down for the same reason, capital formation was sluggish and exports are still recovering because of weak western economies. On the other hand, manufacturing is growing well and basic fundamentals from interest rate to inflation rate remain good.

But overall confidence in the economy is down. Aside from the coup, the political situation is also largely to blame. Our fiscal deficit problem has spooked our international creditors, and this could mean a lower credit rating that will raise our interest payments and worsen the deficit problem further. On the other hand, we could not be faulted for lack of effort to control it, to the point that there is a significant decline in government consumption and construction. That’s not good for economic growth either.

Still, our economy continues to grow, but Prof. De Dios warns, we cannot be sure of the sustainability of its growth. And if I may summarize his presentation, I would do that by way of revising the campaign theme of former President Clinton: It is politics, stupid.

While the political chaos may seem normal to us, institutional dysfunction turns off prospective foreign investors. It boggles their mind, Dr. De Dios said, that contracts can be disregarded easily when a new administration steps in or by order of the judiciary. The reversal of roles, as what happens when legislators act like judges or judges act like legislators is difficult to explain to those who could provide job-creating capital investments here. Endemic corruption in our government institutions seals our fate.

Dr. De Dios showed shocking graphs and data that dramatize how far our neighbors have left us behind in the area of attracting investments. The question now, he said, is whether we will be ready to take advantage of what could be a turnaround in the world economy soon. Personally, I don’t think so.

In the end, the negative influence of our politics is a continuing drag, Dr. De Dios observed. What we need is a political system that will support economic growth. It is not enough, he said, for us to have such positive fundamentals as low interest, low inflation and stable currency unless we have political stability as well.

In a worse case scenario, he warned that capital flight, steep depreciation of the peso followed by cost push inflation leading to corporate bankruptcies and job layoffs could happen. We could face an economic scenario similar to the years of the Asian crisis as soon as late this year (by Christmas?) or early next year, unless we are able to sort out our political problems. A sane political milieu is a prospect that’s foolhardy to bet on.

In sum, Dr. De Dios concluded that our economy is under threat. And we only have our kind of politics and politicians to blame for it.

My Globe

My daughter Trishy, who is the cell phone whiz kid in the family, is up in arms against Globe. She was complaining that "sobra na talaga yung Globe na yan." First of all, Globe reduced the text message allocations. She’s pissed off because she is on allowance, as most kids are. Now, she complains that Globe has blocked all websites except My Globe from being accessed via the WAP service of her Globe cell phone.

Frankly, I don’t know what she is talking about. Even if my phone is technically capable of doing it, I don’t know how to access the Internet from my cell phone… nor do I have the need to. But you know the kids… they are the ones powering the cellphone companies into record profits.

My phone is perpetually on silent mode, so I have no need for ring tones at all. But apparently, kids like to access websites that give free ring tones and icons but are now being prevented by Globe from doing that. I imagine Globe did that because the free sites are taking business away from them. Globe charges for every ring tone or icon downloaded from the MyGlobe site.

In fact, this is the advantage of Globe from Smart, as far as kids are concerned. I am told Smart charges something to access the Internet via WAP. Globe does not. And Globe must have realized that they are losing something there.

But in blocking sites other than MyGlobe, the kids are starting to feel that they are being given a raw deal. This is why some of the kids are talking about fighting back, except that they are so addicted to their cell phones and the cellphone companies know it. Piltel even called its new brand, Addict. (By the way, I think that Addict branding is unfortunate, specially if you read the language of the promo materials. The AdBoard should investigate if self regulation means anything at all).

Some of the kids are organizing themselves to tell the phone companies they cannot be taken for granted. They think the NTC is inutile so they are taking matters in their own hands. They are forwarding e-mail messages encouraging people to cut down on their use of the cell phones. I doubt if this campaign will work but I find the methods they advocate interesting, if only because it would save me money in the end. Here are some of their suggestions to hit back at the phone companies.

First of all, 1) stop forwarding generic greetings and jokes; 2) stop sending "k" merely to confirm receipt; 3) stop using "send to many" unless really necessary; 4) avoid downloads. Downloads cost the consumer from P2.50 to P10, while the real cost is only P0.50; 5) prefer email; 6) use the cell phone only for important communications; 7) for prepaid card holders, pahabain ang period na "walang load"; 8) find ways of using the "miss-call" in line with the text/call avoidance.

Heck! I am already doing most of those things because I am part Ilocano, on my mother’s side. But as my daughter points out, I just make the phone companies happier because I do not use up my monthly allocation and all that just turns to dust at the end of the month. In the United States, some cell phone companies carry over allocation not used in a month, but not here.

So now she decided it would be cost effective for me to let her use my cell phone whenever possible. That‘s just so I get my money’s worth, she reassures me. And yes, she has mastered the use of the "missed call" technique, which I assume, is the next thing the cellphone companies will curtail.

I guess, it is only business. Then again, it also makes sense for the phone companies not to take advantage of the kids too much. They are their golden egg laying geese, so to speak. It isn‘t nice for the cellphone companies to think like dope pushers who get the kids addicted to free service then charge them when they are already hooked. But that‘s what‘s happening.

Reported by: Sol Jose Vanzi

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