A young man asked a university professor during a forum: “How are we students affected by the economic crisis? And if we are affected, what can we do so that we won't be affected?”
Amused, the speaker replied: “You should start by reducing your cellphone load consumption.”
The answer elicited varied reactions from the crowd, mostly teenagers who considered texting a lifestyle. Some agreed. Others protested.
But while unlimited calls and text messages are available, University of San Carlos economics professor Fernando Fajardo said belt-tightening measures can be as simple as text messages.
“Rather than sending messages which are not so important, why not refrain from texting too much? You will save money that way,” said Fajardo.
Fajardo also advised people to take the buses when traveling to towns and cities that are two to four-hours away.
At Cebu City’s Carbon market, Erwin Gok-ong, president of Carbon Market Vendors Development Cooperative (Cemvedco), said consumers need to buy early to get discounts or cheaper buys.
Gok-ong said prices of vegetables, meat and fruits are now stable and are not expected to increase by more than P2 this season.
“Mas maayo pud siguro kun mopalit mo daan og sayo para dili mahasol unya naapa chance nga makapalit og mas barato (It's better if you buy early so you won't face the hassles of a crowded market and you also have the chance to buy cheaper goods),” he said.
Customers should also buy their vegetables along the streets of Magallanes, M.C. Briones and F. Gonzales from 10 p.m. to 2 a.m. from farmers themselves because the prices are cheaper.
Sliced vegetables can be bought between 4 a.m to 7 a.m. near the police station, he said.
Simplify lifestyle
People with urban lifestyles should rethink plans to watch the movies or dine in restaurants, said Cebu Bankers Club president Zosimo Lim.
“It's not eliminating your lifestyle but at least, you trim your spending habits. If you go to the movie thrice a week, you go once. If you eat in restaurants often, better decide to eat at home,” said Lim, also assistant vice president and branch head of the Export and Industry Bank Cebu.
Lim said consumers should also think twice about using their credit cards.
“We don't know how long this crisis will go so we better be prepared. We still don't know yet how deep is the wound the crisis will inflict on us. Common sense on savings should be done,” he said.
He noted that people should be appeased that Philippine banks are in the best position to withstand any crisis because of its huge capitalization.
Banks still strong
“Every year, the Central Bank (Bangko Sentral ng Pilipinas) has a timetable that a certain bank should have this paid-up capital. That is why some banks merge because they do not attain the required paid-up capital,” said Lim.
Lim said Philippine banks are also stronger now compared in 1997, when the country was affected by the Asian financial crisis after the BSP encouraged smaller banks to merge.
He added Cebu and Philippine clients should be worried that banking giant Citigroup retrenched 50,000 employees after reporting a third-quarter loss of $2.8 billion.
He said Citibank Philippines is independent with its own capitalization.
“Because Citibank Philippines also carried the word 'Citi' as a brand, it cannot be avoided that people will ask questions but people should remain calm and trust that our banks here are self-reliant,” he said.
Those who plan to buy real estate properties should also reconsider, said Efrain Pelaez Jr., president of Coralpoint Development Corp.
“Generally, 2009 is not a good year to buy. If you do buy, you have to watch out for developers with the track record or else any further construction of the development might be freeze because of the crisis,” he said.
Ibon Foundation executive director Jazminda Lumang also said the coming year is not a good time to invest in stocks.
People, she added, should invest in agriculture or manufacturing, which can bring in money for the country and jobs for the people.
Those who have stocks should hold on to their shares, said Fajardo.
“Do not play in the hot money market because they will come and go now. Do not think of buying now because you will eventually sell it. That's not a good decision. Hold on to your stocks,” he said.
Be entrepreneurial
Prudent spending is encouraged but this does not mean that small business will not thrive under challenging economic times.
Desiree Toring-Pino, 32 and mother of two, said business can start when people need more money.
“You can still earn especially when what you're selling is something that the people needs,” said Pino, who operates cellphone loading stations in barangay Calawisan, Lapu-Lapu City and in barangay Day-as, Cordova town.
Pino worked for a Japanese firm inside Mactan Economic Zone for 10 years.
She started working in 1998, a year after the Asian financial crisis. She resigned in 2008 for family reasons, at the height of a global economic slowdown.
In the decade that she worked as len preparator to final inspector, Pino witnessed several retrenchments due to slow demand from buyers abroad.
“The company lays off once a year or sometimes twice. If nobody orders the product, to which a group of employees are assigned, we (employees) have to go,” she said.
Positive attitude during trying times like Pino's creates business opportunities, said Steve “Bo” Benitez, president of Coffee Centrale Inc.
The same positive attitude encouraged Benitez to put up Bo's Coffee Club in 1996, a year before the Asian financial crisis.
Benitez said he expects new businesses to be born amid the economic crisis next year.
Work on strengths
Since Cebu is now hailed as the top emerging outsourcing destination worldwide, industry players should work on that reputation to attract more companies to locate here, said Bonifacio Belen, executive director of Cebu Educational Development Foundation for Information Technology (Cedf-IT).
“We have the talents and we have the infrastructure. We should harness our strengths more and work on our weaknesses,” he said.
In a recent ICT summit in Iligan City, Cedf-IT signed a declaration with nine other ICT councils to form the National ICT Conference of the Philippines, which will serve as a venue to share good and successful business practices.
“The market requirement is so huge that every one can have a share. It's one for all, all for one,” he said.
Belen also dispelled rumors that the business process outsourcing industry (BPO) in Cebu will slow down because US President-elect Barack Obama is pressured to retain jobs in the US.
“Many of these contracts have been laid down before (the economic crisis) and we are confident that the less hit industry in this crisis is ICT.”
“Medyo reactive lang siguro yung mga nagsasabi na ICT will suffer. Of course, there is no crystal ball that can predict what will happen in the future but at present, there are no indicators that will lead to such pullout (of companies from locating in Cebu or the country),” he added.
Belen said Cebu and the country will see a flow of small and medium BPO companies from the US to outsource operations since they are the ones which need to cutdown operations costs.
For the sector which is hardly hit by the crisis, highlighting the resiliency of the exports is already one way to survive, said Jay Yuvallos, president of Confederation of Philippine Exporters Foundation (Cebu) Inc. (Philexport Cebu).
“The resilience of Cebuano exports is one of our trademarks. We are confident that we can weather the storm. It is a challenge. Anybody can feel it. But it doesn't mean that everybody is suffering and not doing anything about it,” said Yuvallos.
“Exporters, who are still in the game now, are much stronger because they are able to withstand the crisis. We are exercising prudent spending and financial discipline by controlling overhead costs and implementing efficient system,” he added.
Cebu Gifts, Toys and Housewares Foundation Inc. (Cebu GTH) past president Pete Sepulveda said exporters in Cebu can also jump from creating one design, or one product to the other using the same materials.
Hence, most companies here are in the best position to withstand the crisis.
“We complement each other. Some companies here have multi-products which mean that they produce fashion accessories, they also produce GTH,” said Sepulveda, president of 35-year old Ian International Inc.
While the crisis grinds them, Sepulveda said the creativity of the Cebuanos also emerges.
“The crisis pushes you to the wall. What you do is to kick and fight back. You continue to innovate,” he said.
Yuvallos was optimistic that the export sector would climb back by mid-2009 as new markets are formed and some have died down.
This will be the result of their efforts to explore opportunities from markets like Europe and Middle East, said Eric Vincent Casas, president of Cebu Furniture Industries Foundation Inc. (CFIF).
CFIF has started implementing the P8-million design and product development program which gives emphasis on design mentorship, student internship, materials manipulation and design fora to better equip and prepare member companies in the coming years.
The P5.6 million of the P8 million was obtained from a grant from the Export Development Council, while P2.4 million was the counterpart of CFIF.
Sit down and talk
While export companies have laid lay off workers or reduced working days from five to four to cut overhead costs, Eric Mendoza, president of Mandaue Chamber of Commerce and Industry, said it is important for labor and management to sit down and talk about possible measures to undertake together.
“We don't want to be in ever gloomy situation here. We have to create maximum flexibility so let us set aside differences,” he said.
Marciano Arsalon, president of Clear Export Labor Independent Union, agreed. But he said company owners and the government should help them educate fellow employees about the current economic crisis.
“Kinahanglan nga ma-explain sa amoa kun ngano mahitabo man ni ug nganong kinahanglan ta magsakripisyo usa (There is a need to explain to us why this is happening and why we need to sacrifice for the moment),” he said.
But militant labor group Partido ng Manggawa Cebu (PM Cebu) said this is just sales talk that companies use to exploit the labor force.
PM Cebu suggested a bailout and stimulus package for the workers.
“We demand that SSS, GSIS and OWWA release funds sufficient to subsidize all private sector workers, government employees and OFWs who will be laid off due to economic crisis. The subsidy should last until the workers could find a new job up to a maximum of six months,” said Eddie Jumao-as, secretary of Neostone Union.
Jumao-as lost his job last Sept. 18 when Neostone Architectural Accessories Inc. in Mandaue City closed down.
Among export companies, Yuvallos of Philexport Cebu, said they “exchange notes” and “share inventory” as means of streamlining operations.
The year 2009 is said to give everybody a headache. But as most economists and businessmen show, this is no time to fret.
Economic activity has to continue or else, there will be no economy to speak of.
Maximizing resources by saving on what can be saved and cutting down on unnecessary purchases are simple, yet, practical means of extending that limited budget as the crisis persists.
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