052807: Editorial: Upbeat

Editorial:

Upbeat

The good news is that, despite the murder and mayhem and allegations of widespread fraud in the May 14 midterm elections, the nation can now go back to business as usual. And that means the economy will take center stage, at least for now, with businessmen generally optimistic about their prospects for the second and third quarters of the year. The Bangko Sentral ng Pilipinas (BSP) disclosed Friday the results of its recent Business Expectation Survey (BES), showing possible business expansion and a hike in employment in the months before the onset of the holiday season. According to BSP deputy governor and officer-in-charge Diwa Gunigundo, more firms indicated expansion in their activities in the coming months. “More economic activities are expected to happen—not only in this quarter, but also in the third quarter,” he said. “Even with our concerns over excess liquidity, if business is robust and bullish, that extra liquidity would be absorbed and, therefore, won’t have to be inflationary.” The BES results, culled from over 1,076 business executives from the top 5,000 corporations in the country, indicate widespread optimism across the industry, services, wholesale, retail and construction sectors. “The people we surveyed said they have a better outlook because of a generally stable macroeconomic environment,” Gunigundo said. Other factors contributing to the optimistic outlook include the expected economic expansion in Asia, the increase in business opportunities during the election and an increase in spending due to the resumption of classes. The survey indicated that businessmen are less optimistic about their prospects in the third quarter because of the cyclical slowdown in consumer spending due to the onset of the rainy season. But prospects in real estate and infrastructure will still be bright as developers take advantage of the heightened demand in the property market. So there. If the mood in the business community is generally upbeat, then the country’s overall economic performance should be even better than last year’s. Unless, of course, there’s a major political crisis that could trigger seismic waves in the economic front. But that’s highly unlikely, because the current administration, though facing the prospect of an opposition-dominated Senate that could put up numerous roadblocks to Mrs. Arroyo’s legislative agenda, remains in control of the Lower Chamber and local governments.  The rest of the year is likely to be politically uneventful, as newly elected officials try to settle in and warm their seats. This should give the economy the elbow room it needs to sustain the gains already made in recent years.   *****  Downward   While at this, the country’s economic managers ought to sit up and take notice of findings that we have made little progress in promoting e-commerce compared to our neighbors. A study made by the Philippine Institute for Development Studies, a government think-tank, indicates that the country performed poorly in e-commerce than Thailand and Indonesia, both of which started using the Internet at around the same time or even much later than the Philippines. The result: lost trade opportunities for the country, despite the dot-com boom and rapid advances in information technology since the 1990s. While the country has a present Internet population of 11 million, only a quarter of this actually use the Web to buy products and services online. While we weren’t looking, it seems, other Asian countries aggressively promoted the use of information technology and the Internet in conducting business, giving all types of enterprises, from small to medium to large ones, limitless access to information as well as income-generating opportunities. The study found that the capacity and knowledge of domestic small and medium enterprises to effectively utilize e-commerce is still underdeveloped. Many firms would like to sell products and accept payments online, but are unable to do so because of the high costs of putting up an e-commerce website, it said. The study recommends that the government undertake immediate and appropriate measures to encourage the development of e-commerce by improving our technical and human capacities. That, of course, is easier said than done. The Philippines lags way behind Japan, South Korea or Taiwan in e-commerce because these countries already have in place the infrastructure for it. If e-commerce has failed to take off in the country, it’s because we have yet to reach a level of economic development that would allow us to allocate more resources for information technology. But the first steps should be taken now. There was a proposal in the past to create a Department of Information and Communication Technology that would synchronize all efforts to propel the country to the 21st century insofar as ICT is concerned, but apparently the government’s priorities lie elsewhere. To this day, all we have is a Commission on Information and Communication Technology that’s hampered by lack of funds, though not lacking in enthusiasm to get things done. We have to do more to get on the information superhighway and take advantage of the immense benefits it offers to emerging economies like ours.

 

http://www.businessmirror.com.ph/05282007/opinion01.html