How's The Economy Doing?

[Lightspeed]

Mixed ang signals na lumalabas on the economy.

On the one hand, electronics exports are down because of the slowing international demand. Garments exports are also down. Car and automobile sales are down. Real estate is still on the doldrums.

On the other hand, imports have been experiencing slight upticks the past few months, thus indicating better export performance in the coming months. Sales of consumer firms like San Miguel, retail giants SM and Ayala are up, as are fastfood chains like Jollibee and McDonald's. Banks are generally doing OK. The peso is strengthening. Gas prices are on a downward trend. Agriculture posted respectable growth for the first half of the year.

So what's our prognosis? Are we in for brighter days ahead? :)

[zimdude]

This thread was started days before 9/11... and they say that the "world has changed since then."

And now the current situation is claimed to be the "worst since World War 2."

PEx experts, what's your analysis? And can the ordinary PExers do to help?

[mac_bolan00]

there will be a slight recovery in late 2002 but not as strong as what the country had from 1993 to 1995. in that period, there was a lot of investible funds in the international market. seeing that philippine stocks back then was underweight in industrials, banking and real estate, a lot of "hot" money came in. the boom in 1993-1997 was lead by real estate, financial services and of course, consumption.

for 2002, it will be largely consumption-driven. importation thus far has been for semi-finished and finished products. the low importation of capital equipment does not augur well for manufacturing. also, the current real-estate glut will continue for many more years. why did i say this? because the banks' non-performing assets (mostly real estate) haven't even been included in the glut estimate. how big are banks' NPAs? around 113 billion pesos or equal to the combined revenues of ayala land, camella-palmera and filinvest for at least FOUR YEARS. so banking and real estate are out.

the wild card? agriculture. this has always been a mainstay of the economy. it's significance is waning due to industrialization but it could bounce back with investments in irrigation, mechanized plowing and harvesting.

what should PEXers do? i believe increasing one's liquidity is the best defensive strategy. by this, i mean one should limit investments and just keep lots of cash in the bank or on T-bills. i would advise reducing one's spending to the barest minimum but this won't help the consumer-oriented sectors of the economy any. we need to spend! but we should also save.

lastly, despite all these seminars on entrepreneurship and easy-to-make business planning kits, a down economy is definitely NOT a good environment to start a business.