After that much observed (or is it celebrated?) All Saints Day and All Souls Day that has become a customary part of Filipino traditions, the month of November is a time of the year where everyone looks forward to; more than the usual observance and in memoriam of our dearly departed loved ones, the month of November signals the start of the Filipino “Yuletide” celebration, the longest Christmas celebration in the world. Officially, the Philippines started celebrating Christmas season in November1st, and the holiday season tends to heighten and accelerate as the month of December draws near. As a matter of fact, the spirit of the season is already felt in the airwaves as early as when the “ber” months have started. This kind of lavish local celebration and episode in the last quarter of the year has always changed the pace of economic and business landscape, whether positively or negatively.
Varied attitudes and characters of consumers’ spending habits bring good outcome to the economy, but not necessarily to the individual himself.
Unrestrained spending behavior in the last quarter, or more particularly in the last month or weeks of the year, could bring significant growth to the country’s gross domestic product (GDP) but not in our personal savings. People’s budgetary conduct normally practiced in the first three quarters of the year are cast in the wind in favor of the yearly tradition of lavish spending that accompanies the Yuletide season. As a result of this so-called excessive spending, we tend to generate an economic dilemma that invariably affects our economic system. These include inflation, soaring interest rates, unemployment and other quandaries that accompany such kind of economic ambiguities.
Despite the accelerated GDP growth rate brought about by above normal consumer spending, this activity aside from being inflationary in nature logically brings about depressed savings resulting into anemic investment, that compromises our drive for a progressive economic state.
“Tis’ the season to be jolly,” is the traditional mood that transforms our country from a third world to a developed economy at this time of the year. Perhaps because of tradition and cultural heritage, our spending habits are not properly guided by common sense and rationality. Only after the season is over and the smoke of the season finally clears, only then we begin to realize the repercussions of our economic misdeeds.
These annual events and resulting effects to our economic standing as a nation has become a continuing saga of success and failure that is expected to stay for good. Historical traditions and cultural heritages, no matter how problematic it may be, is bound to remain and practiced because deviations from such may obliterate the image that a nation projects in the outside world and the representation that typifies the nation as a whole.
The joy that the Yuletide season brings cuts across all age brackets, strata of the society, and income group. More than the birth of the redeemer Jesus Christ, the spirit that envelopes the individual, sometimes even beyond one’s religious belief, brings cheers to the person, short of saying that the Christmas spirit and merriment brings out the child in us. And just like a child and its childish behavior, we throw all cautions to the wind when we manifest our spending.
These collective behaviors of the consumers in this time of the year deviate from what should be the logical conduct in the proper handling of finances. As such, the negative ramifications create economic disorders that create a long-term aftermath that is hard to remedy, especially for a developing economy like the Philippines.
But most people are willing to forego the opportunity to have savings despite the increase in income that accompanies the holiday season, because they would not want to give up the opportunity of celebrating the season without fanfare and other grandiose activities together with the family; an activity that characterizes a typical Filipino family. As such, the last quarter of the year is normally characterized by above normal or excessive consumer spending.
In truth and in fact, whatever shortcomings that the GDP has in the last three quarters of the year is offset by consumer spending in the last quarter, which at the outset may be considered as a growth component but is unsustainable, inflationary and creates disinvestment because of deficiency in savings.
Bourse fluctuating nature
The past few weeks has shown the relative price instability of the local stock market. However you look at it, all stock markets of the world follow the same kind of pattern. If some people think that it is brought about mainly by major indicators like the local gross national product, politics, inflation, unemployment rate, and the likes, think again. The past year or so when the local economy was more “shaky” than now, we had the unprecedented accomplishment of the Philippine Stock Exchange index breaking the 6,000-point barrier market and lately the 7,000-point index. This was done despite the political brickbats that transpired previously.
This was over and above the fact that other prominent stock markets of the world were not significantly figuring out in their performances. What does this all prove to us?
There are many explanations that can be figured out from this local phenomenon, but one thing sure is the fact that we are more mature economically now and cannot simply be influenced by such kind of trivial incidents. Furthermore, the fluctuating nature of the bourse is an independent action of the market from what the local indicators have to offer, at least as far as the local Philippine stock market is concerned.
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