The fourth quarter of 2022 will be crucial for the country’s MSMEs in particular and the economy in general, said Go Negosyo founder Joey Concepcion, who is also the Private Sector Advisory Council lead for Jobs. He is now urging that mobility be maintained to ensure that the country’s economic recovery does not stall, especially during the holiday season where consumer spending is expected to be at its peak.
“We need people going out,” he said. “If people don’t spend, this will affect our economy. How will we attain the growth target that is needed to maintain our credit rating?” he said. “The last quarter, beginning this October, is crucial for our MSMEs.”
Concepcion said the external factors that are threatening to weaken consumer spending are beyond the government’s control. “We cannot control the rising prices and rising interest rates. External factors like the conflict in Russia and Ukraine are now affecting all of us,” he said.
He recalls that in 2021, the private sector cooperated in a strategic lockdown that prevented the spread of Covid and ensured mobility during the holiday season. But unlike then, when increased vaccination rates helped open up the economy, there is nothing that the Philippines can do about the US’s attempt to tame inflation in their country by raising interest rates, or if and when the conflict between Russia and the Ukraine will end.
“It’s a different situation,” he said. “We are facing strong headwinds, but there are things that can help us sail through and come out with a strong economy by the first quarter,” he said. “Hopefully OFW remittances will continue to buoy the economy, seeing that already the strong dollar is adding ten percent to the value of dollar remittances,” he said. He added, however, that MSMEs are still bound to feel the impact of rising prices in goods and commodities.
“What we can control is our own willingness to keep businesses active,” he said. “There are actions that can be taken to mitigate the effects of rising prices so that the economy remains active throughout the holiday season.”
First is the continued vigilance against the virus, especially now that students have returned to in-person classes and outdoor masking rules have been relaxed. “Although the pandemic is now pretty much under control, we must continue to be vigilant,” he said.
Another is postponing the implementation of work-from-home arrangements to next year when it is hoped that prices will have stabilized and mobility will not be as critical to economic activity as it will be in the final quarter of 2022.
“POGOs leaving the Philippines will have an effect on our economic activity. If we push for 100 percent work-from-home in the IT-BPO sector, this will greatly affect the economy, especially now that we are seeing more turbulence due to the Russia – Ukraine conflict,” he said.
Concepcion said manufacturers are already doing what they can to cushion the blow on consumers. “The manufacturers and the large companies are passing on the increases slowly, so that consumers do not get shocked by the inflation,” he said.
Likewise, he expressed confidence on the monetary board and the BSP’s ability to come up with policies that will ease the burden the Filipino consumer.
Moreover, he said patience and cooperation are now more important than ever. “Like in 2021 when everybody stepped up and worked together, Filipinos must come out and contribute to economic activity,” he said. “The investments that resulted from the President’s US visit will not be felt until months from now, so we have to make sure our economy will be strong enough and ready when these investments start flowing in,” he said.