98jan01 – Scary dark clouds ahead; Crisis bad for De Venecia

POSTSCRIPT / January 1, 1998 / Thursday
 
Scary dark clouds ahead; Crisis bad for De Venecia
By FEDERICO D. PASCUAL JR.

fdp5SOMETIMES I wish I were writing this column in Pilipino, just so our American neighbors will not be able to read it and thereby witness our sordid self-flagellation.

While we wish we could fill this space with nothing but good news about home, we ask your indulgence when we report on what is obviously wrong with a number of things this side of the Pacific. There is bad news, especially those affecting the economy, that we simply cannot ignore.

Reading yearend reports has become depressing. Some housewives stop reading after their first encounter with a paragraph with horrifying economic data.

The economic hole we find ourselves in is not as big as those where Korea and Thailand have fallen. But after being lulled by the sweet assurances of the Ramos administration that we are on our way to NIChood and that prosperity is at hand, the sudden economic turmoil has been unnerving, if not frightening!

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THE effect of the peso’s 50 percent depreciation since January was very evident in the sluggish pre-Christmas shopping in the malls, where there was more window shopping and mere malling than actual buying.

The queues at the checkout counters were not as long and shoppers were lugging fewer items. Owners of more expensive restaurants also talk of fewer people opting for fine dining.

With inflation eating into the purchasing power of the peso and with higher prices tacked on goods, plus the specter of layoffs and higher interest rates in the coming year, many a sensible buyer had limited themselves to essential purchases.

Prices, especially of goods with foreign components, are expected to soar higher with the new year. With the dollar having fallen through the P40 floor, such imported materials as oil, iron, animal feeds and fertilizers are now more costly and will push prices of fuel, farm produce and construction materials.

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A NUMBER of major real estate projects had been aborted, sometimes with nervous foreign partners pulling out their investments. Speculators who had bought condominium units or lots in classy enclaves now find themselves saddled with non-performing assets and harassed by banks pressing collection and announcing higher (23 percent and up) interest rates in the coming year.

Many other firms hard-hit by the economic squeeze are forced to stop operations and lay off personnel. Some of them should have called it quits in the last quarter of last year, but scraped up enough resources to stay on at least until Christmas so their people would still be employed and entitled to bring home yearend bonuses before they are rendered jobless.

Toyota is reportedly closing its plant in the Philippines because of its pile of unsold cars. Banks have their yards full of repossessed cars whose owners could no longer keep up with the amortization after their earnings dwindled or their businesses, like real estate, hit the doldrums.

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THIS sorry state of the economy is not entirely the fault of the Ramos administration, since some of the forces that triggered the crisis came from outside. In fact, the entire region is in a tailspin with the mighty Korean economy itself bleeding on the ground.

But the people would have appreciated the government’s predicament had President Ramos and his economic managers been more honest in telling us the real story instead of dressing it up with phony and misleading data.

President Ramos and his boys would win more points if only they would show less profligacy. He should be more judicious when attacked by travel itch; more resolute in cutting down costly bureaucratic corruption; more restrained in raising megafunds from investors and businessmen chasing government contracts.

But whether it is mainly his fault or not, President Ramos now faces the prospect of exiting in June 1998 to the angry jeers, not cheers, of a population in economic distress.

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THEREIN lies the political misfortune of Speaker Jose de Venecia, the Anointed One of Mr. Ramos.

De Venecia’s political stock, particularly as regards his being the presidential candidate of the administration Lakas-NUCD, will have to go up or down with that of his benefactor. With the economic difficulties ahead, which would be more pronounced as the poll campaign progresses, Messrs. Ramos and De Venecia are expected to experience rough sailing ahead.

But the opposition bet, Vice President Joseph Estrada, does not appear to be a better economic manager. In fact, he admitted his incompetence recently when he publicly begged Sen. Edgardo Angara, his vice presidential running mate, to provide the brains (to Estrada’s braggadocio?) and handle the more difficult aspects of the presidency in case they win.

People have started asking why we should be limited to a choice between De Venecia and Estrada. There are serious efforts to form a Third Force that will unite the other presidential aspirants in a common ticket to provide an alternative.

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HEY, I nearly forgot to wish you all a Manigong Bagong Taon! Mark this: Despite the dark clouds ahead, we will all survive!

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