“Hope springs eternal in the human breast.” It is with hope for a better year that we welcome 2019. But even with a tinge of reality, there are reasons to believe that this year will not be as volatile as 2018.
In the global scene, the bluster of Donald Trump will just be that , all talk. The control of the Congress by the Democrats will greatly diminish his ability to turn the United States upside down. He has also accomplished his mission of making the USA a lesser power in the world stage as he withdrew US forces and erected trade barriers. The United States has become an isolationist entity as Trump pampered to his constituencies of anti-immigration, anti-globalisation and anti-competition. But it will be a stalemate in the remaining years of Trump’s 4 year term (shorter if he is impeached) as Trump and the Democrats allied with some Republicans hold equal power.
In the meantime, stabilization globally will be the product of the rise of China and Russia with both Xi Jinping and Valdimer Putin enjoying immense power and little resistance from within. They will rush to occupy the space vacated by the US with Russia seizing the military initiative and China the trade opportunities. With their political clout they will restore some degree of the world order, necessary for each to attain their goals of greater political and economic domination. The rest of the world, especially Europe will fall in line, especially as they will be beset with internal turmoil and as their strong leaders with a global perspective exit.
It should be good for business abroad and within the Philippines as global uncertainty is lessened. Price stabilisation can lead to better business planning and greater capability to manage costs. As the US markets exhibit less growth, funds will gravitate to the Asian markets with the Philippine stock market affected positively. Postponed IPOs will be launched adding to a vibrant and opportunity laden stock exchange.
Of greater importance will be higher investments flows especially as the Build, Build, Build projects of the Duterte administration are started all over the archipelago and DPWH Secretary Mark Villar (low profile but delivering results) completes the infrastructure projects stalled during the Aquino administration. The May 2019 elections will ensure that businesses can deal with local government officials in the seat for the next 3 years providing stability.
It is hoped that the Duterte administration will have learned the lessons of 2018, especially that inflation should be addressed not by monetary moves but more of the supply and fiscal side. The economic team should not burden the economy with more taxes, especially excise taxes and the cabinet acting as a team should resolve the logistical issues to allow the delivery of essential produce to the consumers. The “ease of doing business” should be actualised not just remain a signed bill. Government agencies should adopt a policy I initiated when I was Managing Head of the Board of Investments – the request of business is automatically approved if no action is taken within a fixed period. It’s criminal for the Toll Regulatory Board not to come up with a decision on a request for toll increases dating since 2012. Why will business participate in public-private partnerships if government does not do its share?
The results of the May 2019 elections will drive the point that the Duterte phenomenon is short lived as Duterte candidates (Bong Go and Bato De la Rosa) lose to the traditional politicians in temporary alliance with the administration. The Duterte group will revert to a regional grouping even as it tries to gain a wider political base in Mindanao.
As other political groups consolidate and build a stronger base for a post-Duterte period, they will try to be more supportive to business concerns knowing that more perceptive voters want it and that their best legacy is a stronger economy and higher incomes and better quality of life for the Filipinos.
Welcome 2019! Welcome a Better Year for Business and Us All!