IT seems that the prevalent emotion among people as 2016 comes to an end is “relief;” this year has seemed objectively awful. With a string of celebrity deaths bookended by David Bowie’s passing in January and Princess Leia’s this week, an election that is increasingly looking as though it may have been a bad idea in this country, one in which voters in the US apparently lost their damned minds, and a series of other human and natural disasters great and small, the year was discouraging at best.
But humanity has withstood much, much worse. 2016 wasn’t 1348, 1492, 1666, 1919, or 1942. (For those who are a little foggy on history, those were the years of the Black Death, the beginning of the Native American Apocalypse, the destruction of London, the Spanish Flu, and the worst year of World War II, respectively). Despite worries, the global economy grew stronger in 2016. Advances were made against frightening diseases such as Ebola, dengue fever, and the effects of the Zika virus. A 50-year rebellion in Colombia came to an end, as did a half-century of frozen relations between the US and Cuba.
Here in the Philippines, the country’s economic momentum hardly paused despite the uncertainties raised by the outcome of May’s national election, and though the country did not end the year completely unscathed (our thoughts and prayers go out to those in the Bicol Region and Mindoro who are currently recovering from the ravages of Typhoon Nina), it was a relatively moderate year for natural disasters by local standards.
2017, however, looks a little less promising.
Geopolitical tensions seem to be on the rise, and show no sign of abating with the imminent inauguration of Donald Trump as the US President, the deepening turmoil over the UK’s attempt to divorce itself from the European Union, growing nationalism, and the sense that things in the violent Middle East—in Syria, in Israel, and in bloody Yemen—are approaching a frightening climax. Terror, despite the best efforts of nearly every government in the world, seems to be on the rise. And after a year that was the hottest on record (surpassing the previous record holder, 2015), there are alarming signs that efforts to prevent runaway climate change may very well have come too late, because scientists have discovered the first signs of the dreaded “clathrate gun:” Widespread melting of permafrost and subsea ice that releases vast amounts of methane, which will lead to an uncontrollable acceleration of the greenhouse effect. Noted scientist and possibly the world’s smartest man Stephen Hawking, in an interview earlier this year, opined that humans may only exist for another 800 years or so; with the climate indications we are now seeing, however, Hawking may have been optimistic.
Despite mostly positive outlooks from the government and analysts, there are some worrying uncertainties
about the year ahead for the Philippines. The country’s markets and currency in 2016 have shown themselves to be more susceptible to outside forces than they typically have been in recent years, particularly in the past couple of months; with geopolitical and global economic prospects looking a bit grim because of the imminent involvement of President Trump—whose very presence undoes 30 years of social, economic, environmental and diplomatic progress in the US—the Philippines’ vulnerability in this area is likely to get worse before it gets better.
In terms of the administration of this country, it seems the optimism that has been expressed about what President Duterte and his team can achieve is based on his extraordinary popularity rather than a clear demonstration of focused competence. In 2017, the government will no longer have the excuse that it is simply working with the leftover budget of the Aquino administration, but will be in full control of its own resource planning; while it is courteous to give the Duterte administration the benefit of the doubt, there is objectively no real reason for confidence. “Wait and see,” which has been the posture of many businesses and investors for the latter half of this year, may be the prudent position to maintain for at least the next few months, which unfortunately may contribute to some economic deceleration.
And finally, there is reason to be worried about what up until now has been a key driver of the economy, the country’s real estate sector. Earlier this week, real estate services giant Colliers International offered an upbeat outlook for the office property sector, but sounded some alarm on the prospects for the residential market.
Coupled with a massive oversupply—something which seems to have taken the market by surprise—and a big disconnect between property prices and the financial capacity of the biggest segment of the potential market, a significant downturn or even a retraction in the sector is becoming increasingly more likely. If that happens, the follow-on effects rippling through the economy could be significant, and very unpleasant.
We survived 2016, and even found a few things to be happy about in a year that seemed to dish out more than a fair share of misery. Hopefully, the experience will have made everyone with a stake in what happens in the coming year a little stronger and better able to deal with the challenges to come. I hope so; a year in which we look back at 2016 with any sort of sense of nostalgia would, indeed, be a difficult one.