Business, Personal + Finance

Monday, April 07, 2008

Worst is yet to come

Monday, April 07, 2008 Posted by Vernon Go 2 comments

Brace yourselves, it’s better to be prepared and informed than not, right?


Filipinos still need to tighten their belts for the next six months as economists predict that the worst is not yet over. Economic experts said prices of rice and petroleum products would continue to soar in the next few months. Meanwhile, the cost of rice, a staple food in the country, is also climbing because Thailand and Vietnam’s harvest weakened. The Philippines is importing rice from Thailand and Vietnam. Experts said the price of the rice and oil will continue to increase because of the big demand in China and India.

We have on one side the picture of a very rapid growth of the Chinese and Indian economy. As they double a lot of their supply of coal, wheat, oil and rice, these things are going to be very expensive in the Philippines.

It would be hard to stop the price increase particularly since the country is facing external factors, political problems and poor governance. "Is a government mired in all sorts of scandals to be trusted by the people? Suppose the government says I'm an honest government, I'm telling you we have to have a slight rise in price to encourage farmers to produce. Who will believe it?

Let's prepare for the worst, let's be ready to tighten up our belts because definitely the worst things are coming but then again, not to lose hope. In the end, the economy is only as good as the people who make up the economy.

Philippine economic growth will slow this year from a three-decade peak in 2007 dampened by weak exports, slowing private investment, as well as rising inflation, a Reuters quarterly poll showed. But government spending to rehabilitate and upgrade public infrastructure after years of neglect should provide some support, analysts said. The median forecast of economists polled was for gross domestic product (GDP) to expand 5.8 percent in 2008, slower than 7.3 percent growth in 2007.

Aside from exports, remittances will also take a hit on the chin, which means slower consumption growth. Fears of an abrupt US downturn loom large in the Philippines, where 16.2 percent of exports are bought by Americans, and where an estimated 30 percent of overseas Filipino workers' remittances come from.

Rice being the staple food of most if not all of the South East Asian Countries, what is the ASEAN doing about this? ASEAN should stop collaborating and begin unionizing (Like the EU) efforts instead to counter the threat of growing economies of India and China. And Each Asean-member country should begin to reform their internal policies and wake up from the threat that is upon them.

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2 comments:

  1. scary... grabe na talaga ito... beginners luck lang nga ba ang pag boost ng economiya natin? tsk tsk

    ReplyDelete
  2. i saw on tfc last night how people lined up for rice. really scary. i feel so sorry for people who have nothing.

    ReplyDelete