Economic Roadmap for 2009

EDGARDO G. LACSON, President, PCCI
Joint General Membership meeting
Economic Roadmap 2009

16 January 2008, 12:00 nn
Grand Ballroom, Intercontinental Hotel-Makati


By now, all of us are familiar with the financial crisis that started in the United States but has eventually damaged the global economy as the problem turned troubles to trauma.

After Lehman Brothers, filed for bankruptcy, a domino effect ensued with numerous financial institutions not only in the United States but in other countries as well seeking financial assistance. Soon after, countries like Korea, Pakistan, and Iceland, and even countries in Eastern Europe like Hungary and Ukraine, to mention a few, are likewise asking for hefty financial support packages.

There seems to be no end in sight yet to the global financial turmoil. Leading industrialized nations across the globe are now into recession. China is in a sharp slowdown. Starting with financial institutions, we now see contractions in major industries like automotive, airlines, and the services sectors, specifically in the hotel and retail industries, with many companies seeking for bail outs. And even in the distressful moment there is some comic relief when theus porn Industry asked for a $5 billion bailout as it claims people can do without cars but people can not do without sex. Who knows, the mafia and other drug cartels may be preparing their respective position papers on the matter.

Levity aside, the seriousness of the issue at hand cannot be underestimated. Confidence in the world financial system is almost totally shattered. And it is confusion worse by the recent Madoff scam incident. Unless and until confidence returns, we are in for a tough ride. As we speak, the after-effects of the financial crisis continue to unfold in every conceivable portion of the world First, was the loss of asset values followed by the loss of jobs, and now we helplessly watch the loss of lives as prominent and lesser fund managers and investors committed suicide. Thankfully, Filipino are made of sterner stuff we may bend but we will never break. We can only hope that the bitter pills being administered by financial authorities while still struggling to comprehend the magnitude of the crisis, would have immediate positive effects to prevent a deep and prolonged global economic recession.

In the years ahead, many countries including the Philippines, will continue to experience the effects of a turbulent and volatile world as a new financial order takes shape from the current economic turmoil. This is the new reality we need to face, we believe. That the dogmas of the quiet past are no longer adequate to the stormy present.

For us today, what is critical is to determine how we will cope with the extraordinary uncertainty permeating today’s business environment, so that we need not lurch from crisis to crisis.

And we are very pleased to have our government’s economic managers To roll out the various government economic programs that would help mitigate and prepare the country from the impact of a slowing global economy.

In the spirit of public-private sector partnership, we have also invited today a panel of reactors from each of the major business organization to provide further insights and analysis on the issues at hand.

At this point, let me take this opportunity to thank all the major business organizations whom I have acknowledged earlier, for their active involvement in making today’s program possible.

The world’s response, and our own, to the financial crisis must be such that the solutions today do not become the problems of tomorrow. As the impact of the crisis ripples through our economy, we need to understand and define clearly the larger role for government in terms of outright ownership of former private-sector assets or tighter regulation. As countries, including the Philippines, implement their respective programs in coping with the crisis, we must cautious in the possible swing of the pendulum from, firstly, a fully unregulated free market economy to excessive regulation and secondly, from open economies to protectionist policies.

Purposely I laid out all the grim scenarios around us not to dampen our hopes but to stress the urgency for collective action.