Catanduanes Forum

After a year of food and oil crises and the onslaught of the financial and economic destruction brought about by the US financial meltdown, we are again facing a new year. Many economists and finance gurus say that 2009 will be the year that we feel the full brunt of the global economic slowdown.

In the Philippines, the government has been frantically implementing or starting to implement various measures that will ensure investments continue to flow into the country and provide more job opportunities in the year of the Ox. For one, the government is expanding its Conditional Cash Transfer (CCT) program to cover around 300,000 families who are part of the bottom 30. This will help ensure that the poorest of the poor will still send their children to school and regular trips to the doctor even in difficult times. Further, the government has also extended livelihood assistance to returning OFWs, giving them an opportunity either to apply for other jobs in other countries like Qatar or start a small business in the country to sustain the needs of their families. The government is also fast-tracking its infrastructure projects, particularly in the first half of the year to provide jobs to more Filipinos. It is also starting to consider other incentives that will encourage local businesses to increase or expand their investments in the country. Among these options is to extend the concession agreement of water utilities for another 10 years from the original period of 15 to 25 years.

For 2009, economists expect a significant number of job cuts, some even think that unemployment will post double-digit increases this year due to new entrants to the labor force (March) and returning OFWs who will be laid off from their jobs in various countries abroad. While there are opportunities available, given the assistance of the government, the question is whether this assistance will be equally distributed and sustained within 2009. Further, exports are also seen to slowdown to almost or zero growth this year, which could further balloon the country's already bloated trade deficit. While the 2009 budget of the government has yet been passed, there are some organizations which think that the country's P1.4 trillion budget is too optimistic considering that there is a global slump. Without good macroeconomic conditions, increasing the tax effort may be difficult to achieve, especially with corporate income tax decreasing to 30 percent from 35 percent and the exemptions of minimum wage earners from paying tax as well as the increase of tax exemptions for breadwinners to P50,000 this year.

With all these developments and challenges, some economists are calling for a "back to basics" approach to insulate the country from certain financial and economic ruin in 2009. Investments, economists said, should focus on developing real sectors such as Agriculture and Manufacturing. This is because these sectors provide the most jobs and in the case of Agriculture, majority of Filipinos are still engaged in this sector--around 1/3 of the poor in the Philippines are in rural areas and engaged in farming. However, with graft and corruption rampant in Agriculture (fertilizer fund scam, swine scam, etc), many investors would rather not get involved in this sector. This leaves many of our farmers fending for themselves. Farmers in the country do not have access to cheap credit, they are not supported by the government which should provide safety nets to ensure that production is sustained, and politicians even steal from farmers by pocketing millions of funds which should go to farmers (Acef, fertilizer fund, etc.). Unfortunately, this is the sad reality of farmers in the Philippines--those who produce food cannot even feed themselves.

How do we cope? This is the real question. We could say that politicians could clean up their acts but with the elections just around the corner, can we honestly expect them to turn into saints all of a sudden? I doubt it. How about vigilance? That is good. In Catanduanes, we have proven that already (Bagamanoc magnetite mining) through the efforts of I Care Bagamanoc. Apart from that, we should teach children or new graduates to dream higher than becoming a call center agent. BPO-based economic growth is unsustainable, but don't take my words for it, the government's own think tank, Philippine Institute for Development Studies (PIDS), said so.

I fervently hope that 2009 will not all be doom and gloom for the Philippines. I'm glad that in Catanduanes, atleast, things seem to be looking up. I hear that Cebu Pacific will start chartering flights to Virac, along with ZestAir and Pal Express. Based on a post in CF, Nissan and Isuzu will be opening in Catanduanes. These are welcome developments for our province, not only Tourism-wise but economically. I'm also glad that the road to Viga is already cemented and that reaching Viga can be done in 45mins to 1 hr, compared to the 3 to 4hr drive it took us in recent years. I also hope that the VAT issue will no longer prolong our wait for the granting of the Yen Loan funds for the completion of the circumferential road in Catanduanes.

Despite the odds and the seemingly insurmountable challenges, I pray and hope that 2009 will be better-than-expected for all of us. Happy new year to everyone! :)