More bad times in Pinas

From Lito Banayo:

THE Senate committee on trade and commerce concluded, after several consultations with the business community, that consumers have been holding off on their usual buying, and as a result, retail outlets, from supermarkets to neighborhood talipapas, have felt the pinch.

Committee chair Senator Mar Roxas said that at first glance, it would seem that rising fuel prices and electricity costs are forcing households to spend less. Representatives of supermarket associations, as well as Mar's favorite palengkeras are saying that sales have gone down by some 20 to 25 percent. That is a lot.

I come from a family of shopkeepers, steeped in trading and retail services. And I know where these retailers and Mar Roxas are coming from and talking about. All you have to do is look around you. Even in the high and medium-end supermarkets, notice how shoppers compare price tags and the net weights of jars and tin cans, with pocket calculators to boot. In fast food outlets, notice how everyone has come up with "super-savers" and cheap "specials". And see how fine-dining restaurant owners count the days between paydays with great anticipation, as those are about the only times their cash registers jingle.

We have a relative who has been in the business of making candles since I was in short pants. They are, as far as I know, one of the country's biggest wax and tallow purveyors. They'd stock up on candles months before All Saints' Day. In our hometown to pay respects to common forebears last week, they were telling my mom how bad business was, how even Chinoys who used to buy tall, big and fancy candles had scrimped.

In fact, in the mausoleum where my lolo and tito were interred, along with some 600 who were massacred by the Japanese during the Pacific War, I noticed how few and how small the candles were. Signs of the times. The price of flowers hardly went up during the traditional "undas". Demand was low, and retailers overbought from their suppliers.

In Benguet and the rest of the montañosa, vegetable and fruit farmers have had more than two years of "indulto". Last year and before, it was massive smuggling of cheap veggies from China and elsewhere that did them in. Now, on top of the smuggling scourge, there is less demand for upland vegetables. The hotels and fancy restaurants buy imported produce; the middle class have foregone pechay Baguio and broccoli, and are into kangkong and talong.

Students of economics, whether they studied under Professor Gloria Macapagal Arroyo or not, know that there is economic contraction when demand lies fallow. When buyers stop buying, or buy less, panic strikes the businessman.

Most businessmen in fact do not mind creeping inflation, for as long as there is increased demand. When demand goes down, prices remain stagnant, or in some cases go down, and profit declines.

That is bad enough. But worse is when the cost of doing business is on the upswing. The combination of demand slowing down and cost pushing upwards is a lethal combination. It is the big squeeze.

You have no demand-pull, but you have a cost-push. Prices remain stagnant, while you are forced to absorb higher costs. The cost of transport. The cost of utilities, most significantly, electricity. The cost of inputs that are almost always imported, and therefore subject to the never-ending decline of the peso's exchange value.

Many shopkeepers are looking to Christmas not as a season of joy, but hopefully, just means to erase the red ink that has accumulated throughout this annus horribilis. If Mar Roxas' conclusions are correct, why, Christmas isn't about to jingle or jangle their cash registers. Wait then till the tinsel wears off. That's when the closures and the lay-offs begin.

President Gloria probably recalls what microeconomic theorists call the "Red Queen" effect, a take-off from that Alice in Wonderland character. You could run twice as fast and remain in the same place. That is the tragedy of today's business. That is the tragedy of today's average Filipino workingman. You could work twice as hard as you ever did, but your profits or your standard of living remains the same. In the case of many, both profits and standards of living have deteriorated.

We are victims of the big squeeze. Squeezed between higher costs and flagging demand. Squeezed between stagnant incomes and the high cost of basic necessities. And it isn't our fault either. We are just the victims, period. Of whom, of what? Of continued and continuing bad governance; of monopolies who corrupt the corruptible whose power of discretion is enshrined in bad governance, who have neither accountability nor shame, neither principle nor fear of retribution.

A Happy Christmas? Good luck!

No way dude, sabi ni GMA wala na raw fiscal crisis. Tapos na raw siya! We will jingle all the way!!!

Her secretary for Ssocio-economic planning, in trying to defend his president, said her earlier declaration of a "fiscal crisis" was just a wake-up call for Congress to pass the "sin taxes". Now that the Lower House has obliged her with a watered-down version of these excise tax increases, she is apparently content. And she thinks the international creditors, those whom Cory Aquino once sarcastically called the "noble houses of finance", are appeased.

Nambobola lang pala si presidente. O di kaya, nan-duduro. What a government!

Gloria the lying "magician". After 3 months, tapos na ang fiscal crisis!