BABE ROMUALDEZ: THE BEGINNING OF THE END
MANILA, FEBRUARY 19, 2008 (STAR) TAKIN’ CARE OF BUSINESS By Babe Romualdez - It looks like the prediction of Makati Business Club (MBC) executive director Bertie Lim that this is “the beginning of the end” could become true – not necessarily the end of GMA but the economic boom that never was in this country. Just when the economy is about to take off, cracks are beginning to manifest starting with the continued downward trend of the stock market as investors adopt a wait-and-see attitude amid continuing political tension in the country. In fairness to the MBC, I had a conversation with Joey Cuisia who said that they are not asking for the resignation of GMA at this time, but are giving her a window to rectify the situation by going after those who are guilty.
While the tourism industry is anticipating $5.8 billion in revenues for 2008, there’s trouble brewing with the very recent travel warning from the US State Department because of potential violence caused by the crisis. In fact, a foreign company that was eyeing a geothermal company in the south has indefinitely canceled its plans for investments in the Philippines as they wait for the political crisis to be resolved.
As it is, businesses are being put on hold, which obviously will not encourage economic growth at this time. For instance, an oil and gas transporting services company has decided to put its planned initial public offering (IPO) on hold, with shareholders opting to wait until they see improved stock market conditions.
Just when things are getting better, here comes another political upheaval in the making. Whether we like GMA or not, there is no arguing the fact that the economy has shown its best performance ever with the GDP growth at 7.3 percent in 2007, plus the lowest budget deficit in 10 years posted at P9.4 billion last year.
Ironically, it was former Speaker Joe de Venecia who first conceived in 2001 the “747 Economic Recovery Plan” to eradicate absolute poverty and uplift the lives of Filipinos over the next seven years, which the Arroyo administration adapted in 2003. The objective was to achieve a GDP growth rate of seven percent annually over the next seven years. With a 4.5 percent growth in GNP per capita which is equivalent to a gross GNP of seven percent, half of the average poor Filipinos would be elevated to the middle class on the seventh year of the plan.
The “747 Plan” was anticipating that it would take a minimum of four years before the effects of an enhanced and strong economy would trickle down to the poor. Naturally, we have to take population growth into account for the economy to be able to catch up with the growing number of Filipinos that have to be fed.
The “747” economic plan is like an airplane that has finally taken off, only to find out there is “mutiny in the air” and so the flight had to be aborted and head back to the airport. (Ironically, the airport has become the scene of many crimes – the 1983 assassination of Ninoy Aquino, the alleged 2008 kidnapping of Jun Lozada, and the mothballed NAIA 3 which has become the epitome of the ultimate in corruption.) The way things look, the Philippine economy is not going to be riding at all on a brand new 747 but an old, rickety DC-3 – slow and obsolete, with very little chance of taking off because of overloading passengers – in the form of the country’s 2.3 percent population growth rate. Which is rather unfortunate since in Davos, Switzerland, the international community was lauding the Philippines as the best performing economy in Asia. And now in a span of three weeks, international investors are already looking elsewhere even before they even had a chance to come in and take a look at the Philippines.
The sad part is, it is not the wealthy businessmen who will suffer because they can just cool their heels and put their money elsewhere like they normally do. Certainly, there are a lot of other business destinations with a more stable environment, especially if the dollar continues its slow but steady recovery. On the contrary, the ones who will be caught in the middle of a political maelstrom will be the middle-scale businessmen – they who decided to invest despite the risks because they believe in the Philippines. These are the unsung heroes of the country.
But in the end, it will be the poor who will bear the brunt of this potential economic meltdown. Once again they will have to wait until the effects of economic growth will trickle down to them. Whether they will be able to wait for it or not is the question, as the “social volcano” clock continues to tick. This is the price we eventually have to pay if we refuse to learn from our mistakes and if we continue to persist in throwing out presidents unconstitutionally. And unlike the previous “People Power” episodes in the past, this time, this one could turn violent. Already, there are hushed talks about the military preparing to “save the republic” if violence erupts in the streets. We may not be lucky this time. There is a strong possibility that the armed forces will not hand over the reins of power to a civilian government especially since the top brass would want to protect themselves.
This is the never-ending story of our country – we go through periodic boom and bust cycles and more often than not, the busts are caused by “man-made disasters.” If this whole controversy is not quickly resolved and not done within the rule of law and the Constitutional process, then we can indeed expect “the beginning of the end” for this country’s economic recovery. Worse, it could be “the beginning of the end” of a country that deserves a break from the string of bad luck that it has endured for too long a time.
Chief News Editor: Sol Jose Vanzi
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