WRITINGS on the wall have a way of eliciting fear and discouraging even the bold-hearted fools who rush into complicated relationships where the wise would never dare venture as a matter of self-preservation.
At this particular juncture, the stock market and the confidence level of the business community are painting an ugly picture on the wall.
Profits are slip-sliding away from the moneyed and privileged few who happen to be invested in the stock market as the boom-bust cycle of money flows shifts back to the United States–still the world’s largest economy–as global fund managers, ever hungry for bigger returns, recalibrate the cross-hairs to their next pillage as they comb through the global money landscape ahead of the interest rate increase in the US.
Yes, Juan de la Cruz, those greedy Wall Street types are long packed and flying back to where the grass is now apparently greener—as in greenback green—their luggage bursting at the seams with hot money courtesy of the Philippine Stock Exchange and local losers who got in on the bust cycle of this guessing game of up or down.
Of course, the stockbrokers won some because either way the market and the transactions go, their fees and commissions are secured. At least, considering the hundreds of billions of pesos worth of market transactions, the local economy got loose change from those. Whether or not the fees and commissions in the pockets of the brokers will trickle down to the 22 million poverty-stricken Filipinos is another story.
Then there is this disturbing perception by the business community that paints a bleak picture of the “ber” months of October, November and December, as measured by the Confidence Index (CI) of the Bangko Sentral ng Pilipinas (BSP) Business Expectations Survey.
Apparently, many business people are depressed, with the fourth-quarter CI sagging for the first time since 2014.
“Despite the usual uptick in demand during the Christmas season, business outlook was less buoyant for the current quarter due to (a) perceived concerns over the direction of foreign policies and economic reforms in the country, (b) weakening global demand, (c) foreign exchange losses of importers due to peso depreciation, and (d) lack of supply of raw materials.” That is according to the survey results.
Going by the BSP numbers, the business outlook on the economy turned less optimistic for Q4 2016, with the overall CI declining to 39.8 percent compared with 45.4 percent in the Q3 2016 survey. In the fourth quarter of 2014, the index was at 48.3 percent from 34.4 in the third quarter.
Of course, confidence levels like perceptions and boom-and-bust cycles and results of psychological tests change over time relative to current conditions of a person, a group or a nation.
Over time, the writings on the wall will also fade. What is important at this point—and here is that other story—is for the Duterte administration to succeed is to capitalize on its electoral mandate of 16.6 million votes. What catapulted the President to power was the platform of genuine change and no-nonsense stance against crime.
“This is precious political capital that can and should be used to intensify market-friendly economic policy reforms and deal with those critical development constraints,” according to the Philippine Institute for Development Studies, citing an article from the East Asia Forum.
Only when real change is felt at the grassroots can this country really move on and hopefully with a more pleasant sign written on the wall.