Almost four year ago, I wrote an entry â€œFlying the Coopâ€ in which I observed:
A recent news item says that more pilots have been leaving the country for greener pastures overseas. Philippine Airlines, Inc. (PAL) has lost about 20% of its pilots over the last three years and more are about to fly the coop. This is an alarming development in our continuing brain drain. Even our best trained and highest compensated professionals are packing their bags. A desperate policy resolution from the Philippine Overseas Employment Administration limiting the number of pilots who can work for international airlines has failed to stem the tide.
Things have apparently gotten worse since. Over the weekend, at least 23 international and domestic PAL flights have been cancelled due to the fact that there were no pilots to fly PAL planes. Eight more flights were cancelled today. Continue reading
The Philippine Stock Exchange plunged 12.3% yesterday, the biggest one day loss in its recent history.
The unprecedented drop forced officials to temporarily stop trading, also a first for the PSE.
The “circuit breaker rule” was imposed after the main index fell by 10%. The trading floor imposes an automatic 15-minute halt to trading if the PSE index falls by at 10 percent. The rule is designed to calm down emotional selling. To no avail, as sellers dumped shares after the break in a frenzy of panic-selling. Continue reading
The expanding global financial crisis is expected to slam the country with the force of a tsunami, which began as a ripple in a far-away land but will be at the height of its force when it hits Philippine shores. The storm signals are up.
According to blog site Innovation Journalism, the shock waves throughout the U.S. and global economy and the fallout from the most colossal financial calamity since the Great Depression has only just begun.
The government urged the public to prepare for a â€œworst-case scenarioâ€ amid the steady negative impact of the US financial implosion on markets elsewhere in the world. For the Philippines, an already difficult situation is about to become worse. Continue reading
Itâ€™s been called a tectonic shift in the global economic environment, with aftershocks to be felt for some time to come.
First, investment bank Lehman Brothers , a firm founded in 1850 and which survived the Great Depression, two world wars and every market upheaval before and since, went belly-up over the weekend. Then rival Merrill Lynch was sold to Bank of America for a fraction of its value of just a few months ago.
American International Group (AIG), one of the worldâ€™s largest insurers, was effectively bought by the U.S. Federal Reserve for a bailout amounting to US$ 85 billion to forestall its impending bankruptcy. AIG is the mother company of the local Philippine American Life Insurance Company (Philamlife). Itâ€™s often been said that when the U.S. sneezes, the Philippines catches a cold. Well, when the U.S. gets a cold, we get pneumonia. Continue reading
Here are my forecasts for the next half of 2008, and I feel gloomy just thinking about most of them.
1. More Oil Price Increases â€“ a worldwide trend with no let-up in sight. I get a fever every time I go to the gas station. Unleaded is now P60.00 plus per liter at the pump and rising weekly. Crude hit a new record high of U.S.$ 143/barrel and keeps climbing. It will get worse in the last quarter as winter approaches. I fear we will hit the nightmare scenario of U.S. $ 200.00/barrel sooner than predicted.
2. Food prices and other basic commodities will increase - a no- brainer. The effect of rising energy costs, combined with other factors like increased demand and diminished production, will drive up the inflation rate, which in Metro Manila has reached double digits. Expectedly, food will exhibit the steepest price increase. The negative impact on overall income due to inflation will naturally lead to a drop in personal consumption. Which will in turn slow down the economy etc., etc. ad nauseum. Continue reading
Jared Diamond, professor at U.C.L.A., asks: Whatâ€™s your consumption factor ?
His question is relevant as the world reels from the oil and food crises, which will get worse before it gets better. The Philippines will surely be one of the hardest hit, as crushing poverty combined with the continually rising prices of basic commodities will result in a potentially explosive social cocktail. President Arroyo, an economist herself, understands this all too well. This must keep her up nights, as it does many of us.
Diamond tells us to consider the number â€œ32â€. Continue reading