(from the September 2024 issue of our monthly newsletter, Properties Connoisseur)
It is distinctly Filipino to be elated by the arrival of the so-called “Ber” months. Received with renewed excitement and enthusiasm, this season transcends reason and logic; after all, September is still part of the traditionally lean 3rd quarter, while Christmas bonuses are normally released only during the last month of the year. Still, in an increasingly cynic world, nothing turns the mood around more strongly and swiftly than the perennial Christmas countdown, with each passing day bringing in more hope and exhilaration. Although arguments can be made on the negative effects of the season, such as lowered productivity levels due to heavier traffic congestion, successive parties, holidays, and diverted manpower hours to give way to Christmas carol and dancing practices, it is undeniable that in the end, this is really the best period for business, thus the popular anecdote, “hindi araw-araw Pasko”.
This time around though, there seems to be a lot more news and developments in tune with the seasons. Of course, like most things post-pandemic, information has to be taken in with guarded optimism, but there are indisputable signs that perhaps, there is much to be celebrated for. Here are some points to think about:
PHILIPPINES GETS AN “A-“ RATING
Though Japan-based Rating and Investment Information, Inc. (R&I) is not at par with Moody’s, Standard & Poor or Fitch in popularity and renown, still, coming from an independent, foreign ratings agency, this upgrade merits recognition. To be fair, the Philippines has been fortunate to have had a line of capable and respected finance ministers and central bank governors, steadily building on sound macroeconomic fundamentals and admirably cruising through several crises with reduced and controlled damage; if only the same could be said with other government functions as well.
MANAGED INFLATION RATE
With August inflation rate going down to 3.3%, comparatively lower to the July rate of 4.4% and the previous year’s 5.3%, many are hoping that this serves as an indication that price increases are now subsiding to manageable levels. Though the upcoming months are bound to bring heightened activity, the short respite should provide the needed pause and break from an overheating economy and allow capitalists and entrepreneurs some opportunity to recover depleted financial reserves.
EASING OF INTEREST RATES
The Bangko Sentral ng Pilipinas (BSP) reduced interest rates by 25 basis points, the first time it has done so in 4 years. Aside from this, it has announced that they are looking at another reduction within the year. This development, coupled with worldwide anticipation that the US Federal Reserve will also begin its rate reduction cycle by this month, seems to strengthen the resolve of analysts and investors alike that economic expansion is not far in the horizon.
THE CHRISTMAS SEASON SPLURGE
In an economy driven by consumption, nothing is more beneficial than a season of consecutive gatherings, events and merrymaking. Fueling the festivities would be the release of the annually accrued 13th month pay, and to the fortunate, Christmas bonuses and performance incentives. Of course, not only food and consumer items are expected to gain an upsurge – tourism is bound to profit as well, with both local and foreign tourists expected to fill up hotels and resorts nationwide. And if it seems things could not get better, then check out the next point –
FLOOD OF DOLLAR REMITTANCES
The figurative cherry on the ice cream, dollar remittances tend to increase during the last months of the year, brought forth by contributions from Filipinos abroad on the various celebrations that occur during this time – reunions, Christmas parties, and New Year’s Eve revelry. Recent studies also conclude that more weddings are now scheduled in December than any other month, coinciding with the influx of balikbayans from abroad, and again, the release of 13th month pay to cover wedding expenses, which newlyweds aspire to recover quickly through gifts and solicitations.
There are other happenings worthy of discussion, such as the tempering of foreign exchange rates and the gradual but continuous rise of the stock market index; like those discussed earlier, these too deserve greater attention rather than being treated as foregone conclusions. Truly, there is wisdom in “counting blessings instead of sheep”. While there is no guarantee, majority of companies are now bracing themselves for the final stretch for a variety of reasons – out of anticipation, forecast, and to many, necessity. Whatever the case maybe, each one holds a “reason for the season”. Good luck to all!
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