Real Prospects in the Year of the Dragon
Year 2012 is said to be a year of the Water Dragon. Most predictions indicate a favorable year ahead in terms of economic growth for most countries worldwide. Unlike last year, which was the year of the Rabbit, this year would be a lot better – according to forecasts based on what feng shui experts call the paht chee chart. I don’t know that is but that is how they call it.
If we look inward to our country and assess what actually happened in year 2011, we could probably wish that the feng shui predictions for this year would really come true. We did not have a very bad performance in terms of economic growth last year but it nonetheless needs some significant improvements. Hence, we can give our country and our economy another chance to do better this time. This however seems to be a repeat of our wish last year and all the years that had passed.
According to the most recent Pulse Asia survey, 38% of all respondents believed that our economy deteriorated in the last 12 months between October 2010 and November 2011, and 18% said it improved while 40% said it has remained unchanged. To put it simply and to quote the survey result, it says: “the percentage of Filipinos saying the economy is better now declined by 12 percentage points while the percentage of those who observe a deterioration in the Philippine economy increased by 22 percentage points.”
The result of the survey further says: “Among those who say the Philippine economy is in a worse state now than a year ago, 66% were strongly affected by this perceived economic deterioration, 31% were somehow affected and only 3% did not feel the impact of the worsening economic situation in the country.”
I will stop there because the figures alone could already tell the whole and real story.
On the other hand, if we look at what the economists and leading development institutions have to say about our prospects for year 2012, we can find the following: (a) according to the Bank of America Merrill Lynch in its “Global Economic Weekly” released last week, the Philippine economy is expected to grow faster this year; (b) according to the First Metro Investment Corporation (FMIC) and the University of Asia and the Pacific (UA&P) in their joint 2012 Economic Outlook Briefing also held last week, “the country’s GDP is projected at 5%-6% anchored on an anticipated increase in government spending, robust dollar remittances from OFWs and higher consumption spending”; and (c) according to UA&P economist Victor A. Abola, “…the domestic sector will do well and the lagging sectors last year will bring the economy into the fast lane,” referring to the agriculture, mining, construction and manufacturing sectors.
In terms of investments, gaming, infrastructure and consumer sectors are expected to also remain favorable for investors.
Further, many economists believe that government spending is expected to contribute in sustaining economic growth this year owing to its big-ticket items under the public-private partnership (PPP) program and the DPWH’s other infrastructure projects slated for construction this year. Hopefully, this scenario will create more jobs and employment opportunities which in turn are expected to boost personal consumption and consumer spending to higher levels this year.
Likewise, it is foreseen that international trade performance will also improve with export earnings growing by 5%-7% coming from a “negative performance” last year, while import earnings will likely grow by 10%. Inflation this year, on the other hand, is seen to ease within the 3.5%-to-3.7% range.
On the whole, the forecasts on the economic performance of the country for this year offer some rays of hope to all of us. What seems to be the only negative prospect for the year is the exchange rate which is projected at P43-P45 per dollar – as the US economy is expected to continue to outperform the euro zone. With the economic rebound of the US, it is anticipated that the peso will depreciate against the dollar. As of this writing, the peso-dollar exchange rate is now P44 per US dollar, compared to P43.8 per US dollar just a month ago, or P42 per US dollar some 5 months ago. While this may seem negative, it has positive effects to OFW remittances and international trade.
As the year further unfolds, most of these positive projections and prospects will not happen without leadership, hard work, persistence and policy stability. Many believe that starting the year right would also mean a year of good disposition and prospects. And starting the year right means doing what we need to do – facing squarely the problems of the nation and moving it towards economic progress that is felt by all. If we just let things unfold, the positive forecasts and projections will remain fictional and illusionary, just like the Dragon – the only fictional animal in the Chinese Zodiac.
