• Growth amidst uncertainties

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    EJ-LOPEZ

    The current economic roller coaster ride (growth?) and standstill we are partaking as regards our claim of economic advancement (real or reel?) seem ineffective, if we are to relate it to what the situation really is, as far as the life of the citizenry is concerned. Our experience of protracted “bull runs,” that was conceivably one of the longest in our history, has done nothing to effectively draw or erase the many years of perceived economic misrule and life wrenching hardship the people have experienced in the previous political eras. Everyone was already preparing for a positive turn of events that would have turned the tide to our favor and put us abreast with our more developed Southeast Asian neighbors come the Asean (Association of Southeast Asian Nations) economic integration by 2015. But these turn of events seem to have not eased the burden, if not increased the burden, of some of our people’s economic “calvary.”

    As it is, the 7.8-percent first-quarter gross domestic product growth rate that complemented the 6.8-percent fourth-quarter GDP growth rate the previous year added to the 6.6-growth for the whole of 2012, fell short of the people’s economic expectations. At the outset, the country has already achieved the necessary ingredients of how a newly industrialized country should be, but the impact of the so called “stellar economic performance” seems to have fallen short of what should be the benefit that should accrue to the people as a result of that “stellar” feat. And this should be the thrust, considering that the grassroots should feel the convenience of this so-called economic “development.”

    But this should not bring us to economic exasperation, because the ingredients of a potential tiger economy reside in all our recent economic feats. Just like all other successful economies of the world, a tiger status is not achieved overnight. Growth and industrialization is not a matter of having 8-percent to 10-percent growth rate this year and 5 percent next year, and less than 5 percent the succeeding year. Achieving tiger status requires a greater amount of growth consistency. A more permanent structure of growth should be encouraged and attained. A durable component of growth should be within our reach with the realization of the President Benigno Aquino 3rd’s overseas travel where the ultimate objective is to attract foreign direct investment (FDI).

    With the recent spate of bad news plaguing the local business environment, ranging from the unimproved unemployment rate at 7.8 percent, and the biggest stock market plunge, which the reports said, “The Philippine Stock Exchange index sank 3.41 percent, or 211.12 points to end at 5,971.05, its lowest since closing at 5,934.05 on January 4.” It further added that, “The local currency closed at P43.84 against the dollar, losing 12 centavos versus its close last Friday at P43.72.”

    The present economic “misadventures” point to a lot of economic opportunities lost and should not be left unturned, if only to dramatize the country’s need for a fully developed economy.

    The positive economic ambience prevailing in the US economy and other European Union countries put a halt to what seem to be a never-ending optimism of the Asean region for the past two or more years, which includes the Philippines. Despite the positive swing currently experienced in the western economy, the fact remains that the Asean economy has already gained headway toward achieving the much coveted tiger status; an impossible target a decade back. Thanks to the dismal performance of more advanced economies.

    The bearish mood prevailing in the local bourse is not significant enough to bring us to the economic crisis or stagnation that we are all apprehensive about. The local stock market seems to be overrated and hyped. The people’s orientation of the stock market is not substantial enough to effect a weighty change in our economy. The nature of local transactions in the stock market is too shallow to effect major changes in the system. As such, the local stock market is there primarily as a barometer of investors’ confidence in the local business scene.

    However, such nature of the bourse may not always be good in the long run, considering that not even 10 percent of the population is participants to trading.

    After gaining headway a week ago, the US economy retreated back to lower end not only because of China’s perceived questionable liquidity, but rather of US economic indicators failing to deliver the goods. Although consumers’ confidence was at all-time high since 2008, as reported, the market index does not effect a major change in market fundamentals, but rather traces of market turmoil that remains plus the still “jittery” nature of the bourse.

    The US Federal Reserve reported the extreme fear displayed by market players despite its stimulus package to ease tension and bring back a semblance of normalcy and bullish atmosphere to the economy. This was proven by the unstable movement of the bourse.

    China’s economy is headed to a bubble burst, considering the bullstrong investment that exceeded the full employment level that its local resources cannot anymore accommodate. This inevitably will result into higher production costs resulting into a problem of liquidity. Theoretically, it will be a problem of interest rates resolution but not for an economy as robust as China. China’s economic influence creates an impact and therefore resolves should be done after considering the possible repercussions to trading partners.

    P.S.

    Birthday greetings to my Ate, Ms. Carolina Lopez Puse who is residing in Sydney, Australia, who will celebrate her birthday tomorrow, June 29. Many happy returns of the day Ate coz you deserve all the best that life can give . . .

    For comment e-mail: doc.ejlopez@gmail.com with cc to: opinion@manilatimes.net

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