Why the Philippines is not so badly hit by the global economic recession

IT IS disheartening to hear and read about families losing homes in the U.S., companies being denied access to credit, and retirement funds losing in value.

But here in the Philippines, it is not so bad. In the shopping malls, people milled about, going in and out of stores and lugging shopping bags with them. Agents for credit cards were still handing out application forms. Several other malls in the Metropolitan areas were also on sale this past weekend and people trooped to shop at a discount there and at village bazaars.

As JP Morgan said, the Philippines may weather the financial crisis even if it has significant exposure to an emerging global recession. This is because of internal buffers built in the system. Indeed as the Bangko Sentral ng Pilipinas has assured the public, the banking system is adequately capitalized. The only enemy is when people get carried away by speculations and start to panic. There is absolutely no reason to do so.

Butch Mossesgeld, a certified securities representative for PCCI Securities Brokers Corp., believes God has a hand in it. “You know, I observed that God spared our country from this crisis because during the Asian Crisis that started in 1997 the financial and property sector were restructuring their portfolio and capital structure to stay afloat. Fortunately it was only two years ago that they were starting to recover so they didn’t have the opportunity to invest aggressively. That’s the reason I believe we were spared,” he says.

The Presdient also announced that the government is putting up a P100 Billion contingency fund especially for the infrastructure sector to serve as buffer in case people start losing jobs due to the global financial crisis triggered by the US recession. When the construction business keeps going there are easy and accessible jobs for all types of workers.

As we see it business confidence remains high and there are concrete reasons for being so. Our economic fundamentals are strong. We have survived the Asian financial speculative attacks in 1997, we will get through with this one pretty well.