January 08, 2009
Things good to have in 2009
Despite the general belief that the Philippines will largely be spared from the effects of the global economic crisis, I prepared a list of things (not in order of importance) that would be good to have in 2009 just in case the prevailing optimism is hit by realism:
Cash – cash is in and debt is out. Preferred payment term in 2009: We trust in God, all others cash. If not enough cash is available, have
Credit lines – especially for export trade financing. This requires, however, that the companies' balance sheets are bankable. If not, it would be good to consult an independent financial adviser to separate real assets from emotional assets and to review inventories and receivables. If both are in place (cash and credit lines), it is important to have
Orders – not so easy to get these days if not in the mainstream of consumer demand. With buyers being choosy, products and services have to stand out in terms of design, quality, service or simplicity of usage. Innovation and productivity should be the main focus in 2009. Once you have orders, remember the good old payment term called
Letters of Credit – it is wise to go back to this old-fashioned but fairly secure payment term. One can sleep better! And if the buyer does not want to pay the extra charges, offer to pay the fee. As orders may not be that regular in 2009, business needs
Flexible labor rules and regulations – the discussions with the Dept. of Labor regarding the more flexible interpretation and application of shorter work-weeks, irregular work-hours and reduced work-days with pay deductions have commenced. I am encouraged by the pro-active response of the senior management of DOLE. Secretary Roque has agreed to meet business on a monthly basis to discuss issues. In the context of labor rules on one side and hopefully sufficient orders on the other, we also need
Jobs – it will be inevitable that skilled overseas Filipino professionals and local skilled employees will be laid off in 2009. I suggest to create a website which lists these skilled people so that the segments of the economy that will expand in 2009 will have access to a new talent pool. Trusting that new business in the knowledge field can be attracted to the Philippines due to its reservoir of skilled people (who will not be exported with the support of government?!), it is essential to have
Attractive fiscal investment incentives – something the Joint Foreign Chambers have been requesting for many years. At times like these, it is essential to make the Philippines attractive for investors. This includes income tax holidays for exporters and strategic industries. The Senate is encouraged to follow the House in finalizing this important economic legislation. In order to see the importance of being attractive and competitive as an investment destination, let me quote from a newsletter received from my colleagues in Vietnam : “ Vietnam received investment applications of US$ 65 billion in 2008 and received US$ 11 billion in actual inflows.” However, to attract this kind of investment, this country urgently needs
Infrastructure – as government promised to pump-prime in 2009, it is suggested that it gets the program going NOW. It is impossible to jump-start infrastructure development once the effect of the global crisis affects the 7,000 plus islands. Even if all these things are in place, we still have to agree on some changes in the way we do business. We have to agree on a new set of
Values – I saw a lot of values that we grew up with abandoned in recent years or decades. I even saw some values going bust in recent weeks when the going got rough and when people under pressure forgot about commitments made. I want trust back, I see the need for living up to commitments in good and in bad times, I would like to witness the win of long-term strategies over short-term greed, I suggest to re-visit the virtues of saving over borrowing. In general, I wish good governance to succeed.
Lastly, good to have in 2009 is luck .
I wish all of us a good and manageable New Year.
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