Volatile Economy

Opinions Unlimited

by Atty. Tony(APA) Acyatan (Atty. APA – chairman of Acyatan & Co., CPAs-DFK International is president of PICPA in 1990 and ASEAN Federation of CPAs (1998-2000) and Accountancy Hall-of-Famer (2006).

GLOBAL:  It cannot be denied that the Philippines and her economic parameters: gross national product, gross domestic product, inflation and FX rate, balance of payments and trade,  and other measuring sticks – are affected by international upheavals.  We are truly a part of the world – no matter how small our scales are – more so in finance, business and industry.

Last week – the peso improved to as high as just P44.50 to the US dollar; now the exchange rate is back to the P45/P46 territory.  Ten days ago, stock prices were soaring high in bullish trading – now the shares are generally down.  These are triggered by market developments first, in the USA and Europe and in the rest of Asia, including Japan with its threat of potential recession.  Woe to us – in cases of economic turmoil among global giants, we can be easily trampled upon.

COOP FUNDS:  The Bangko Sentral ng Pilipinas and the Province of Albay has established the first credit surety fund (in Bicol?). The Albay Mayon Credit Surety Fund was launched last week in Legaspi City.  CSFs are geared to assist small business “who are members of coops, as well cooperatives themselves – that have their own business” – to obtain bank loans even in the absence of the usual hard collaterals.

The CSF is created from contributions by well-capitalized and well-managed cooperatives with counterpart contribution from the provincial government and other donors. The surety cover (taking the place of collateral), issued by the CSF will guarantee the loans with creditor banks. The CSF program will increase lending activities in the province and stimulate local economies – generating employment and improving LGU revenues. Mabuhay!

PAL WOES:  The worldwide economic crisis adversely affected air travel.  Airline operators were forced to streamline business procedures, mostly by removing travel perks which was understandably accepted by the economy passengers (like me).  The then upcoming financial problems were clearly visible to the hawk-eyed, but were lazily ignored by the table executives – including those at Philippine Airlines.

As a result, the flag-carrier lost the domestic air travel market to the aggressive approach of Cebu Pacific.  The latter airline hired young workers and make air travel care a joyful job – which the passengers also imbibe.  These talented personnel apparently love their work – and with compensation and perks ranking only second.  Employee loyalty is one trait that Cebu Pacific seems to have injected in the work ethics of its people.

SEMESTRAL F/S:  The big corporations are all reporting billion peso net earnings for the first six months of the year.  Radio-TV broadcasting, universal banking, electronics exports, and even call centers are reporting positive financial operations.  These are good news for the P-Noy administration.  Assuming that corporate taxes are being paid – BIR will be sighing with relief.

So the next more important job of the government is to have these corporate profits flow down to the poorer sector of our populace.  Forget meantime the taxes on the poor – like the VAT and more so, on the toll fees.  Go ahead and hunt for the “pot of gold” being hidden by the big corporations.  Get the loyalty and patriotism of the accountants and auditors – who know so well where the taxable profits are hidden.  God blesses the honest professionals!

EPISTLES:  What we tolerate to hear with our ears – is a good measure of what we will allow to enter our hearts.

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