WITH THE expected slowdown in the Philippine economy this year as confirmed by the International Monetary Fund, entrepreneurs are finding ways to deal with the global financial crisis.

“When the economy is down, nobody spends,” says Karat World top man Felix Gorriceta III. The times thus call for streamlining of inventory. “Stock up on what sells. We don’t experiment much on new merchandise, which we had the luxury of doing so before,” he says.

At publishing company Adarna House, Emelina Almario, president, shares these strategies:
1. Streamline business processes. “We are auditing current business processes and looking at ways to improve them in terms of cutting costs.”
2. Manage risks. “Our various sales channels present different levels and types of risks and we are also looking into these.”
3. Practice prudence with resources. This goes for “electricity, paper and gas (even the small things count!).”
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IT IS disheartening to hear and read about families losing homes in the U.S., companies being denied access to credit, and retirement funds losing in value.

But here in the Philippines, it is not so bad. At TriNoMa mall last Friday, people milled about, going in and out of stores and lugging shopping bags with them. Agents for credit cards were still handing out application forms in the mall. Several other malls in Metro Manila were also on sale this past weekend and people trooped to shop at a discount there and at village bazaars.

As JP Morgan said, the Philippines may weather the financial crisis even if it has significant exposure to an emerging global recession. This is because of internal buffers built in the system. Indeed as the Bangko Sentral ng Pilipinas has assured the public, the banking system is adequately capitalized.

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MY EYES were glued on Suze Orman, well-known personal finance expert and author, as she affirmed to Larry King yesterday on Larry King Live on CNN that the current crisis is comparable to the Great Depression. See the rush transcript here .

Because of the US subprime crisis, the US big banks are falling, and so does everything else—stocks, yields, even the super insurer AIG, so it does seem like the sky is falling worldwide. After Bear Stearns, Lehman Brothers, and Merrill Lynch, two other banks—Morgan Stanley and Washington Mutual–are up for grabs. Just a few hours ago, news came in that central banks in other countries are pumping cash into their economies to help stabilize markets.

So, is this really the Great Depression 2.0?

The Great Depression happened in 1929 when the US stock market crashed on October 29, which has since been referred to as Black Tuesday. Crop prices fell, trade declined, businesses closed, incomes diminished, jobs became scarce, and in Gone With the Wind, Scarlett O’Hara had no choice but to face poverty. It was a devastating event for people who just experienced prosperity in the roaring ‘20s. It spread from the US to other countries and lasted into the late ‘30s when World War II began.

Historians say the great imbalance of wealth and stock market speculation caused that 1929 Great Depression. The rich became so rich, while the rest of America discovered credit, and soon consumers had so much debt they couldn’t buy every new thing coming out of assembly lines. Farmers also encountered an over-supply situation in the international market, so prices fell. Then it snowballed from there.

But thanks to government reforms and assistance, the US and other countries got back on their feet. Economic slowdowns happen, but they don’t last forever.

Since then, financial reforms and restrictions have been put in place, so we stand a greater chance of bouncing back faster from economic setbacks. As the Bangko Sentral ng Pilipinas says, RP banks are safe.

A New York economist shares the same view. Mark Getler, an economist from New York University, was quoted by Wall Street Journal saying: “This has been the worst financial crisis since the Great Depression. There is no question about it. But at the same time we have the policy mechanisms in place fighting it, which is something we didn’t have during the Great Depression.”

So business goes on. Back to work, guys.

NINE point six percent. That’s the inflation rate for the month of May, as announced by the Bangko Sentral ng Pilipinas (BSP). It’s the highest since January 1999 when the inflation rate then was 10.5 percent.

Already, we have been feeling the effects of this: the prices of gas, food, and other basic items have gone up steeply. Blame it on supply problems: With lesser rice supply available, its price has increased. With the price of oil running away at more than $130 per barrel, the prices of gasoline and other oil products have likewise hiked up. And as we know from experience, when gas goes up, everything else follows.

Consumers are expected to lower their spending to cope with the high prices of basic commodities. That may mean bad news to businessmen especially those whose products are considered nonessential.
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Four powerful businesswomen report big successes in 2007 – and are not afraid of what 2008 will bring. An excerpt of the article from Philippine Daily Inquirer below:

Tessie Sy
(SM Group) Retail, banking, property development

“We are confident that the Philippine economy has sufficient momentum to cope with the external challenges facing it such as the weakness in the US and European markets and higher inflation due to the unrelenting increase in crude oil prices. On that note, we decided to pursue our expansion plans across all our core businesses. Both our retail and mall businesses will be expanding outside of Metro Manila, while the banks will complete their consolidation of recent acquisitions. The property group will launch new residential projects, and perhaps break ground for the sports arena and the Radisson hotel which will both be at the Mall of Asia complex. We will continue to sell condo units and beach and country club shares in Pico de Loro. All these will cost the whole group about P26 billion in capital expenditures.”

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