PSE, ADB shockers

DATA showing that the profits of listed firms surged by at least 60 percent in the first nine months of the year don’t lend much confidence in near-term prospects.

According to the Philippine Stock Exchange, asset sales and cost-cuts were largely responsible for the positive margins.

Considering that Philippine corporates suffer from no overcapacity, the earnings improvement can hardly be sustainable.

Companies after all can only sell or cut so much without compromising future growth.

What we need to see are companies building up inventories, if not adding to capacities by expanding facilities or hiring more staff, or both.

Despite the euphoria that some members of the press generated about this or that takeover, these mega-deals in the final analysis emit just hot air and contribute little—if any at all—to the real economy.

To be sure, we shouldn’t expect a lot, given the flattish growth of the economy in the same period.

Economy at a standstill

Data from the National Statistical Coordination Board indicated a 0.8-percent uptick in gross domestic product in the third quarter. With the second-quarter growth revised downward to the same figure, the nine-month performance came in at 0.7 percent, or below the low-end of the official target range of 0.8 percent to 1.8 percent.

The Philippines may have been spared from a recession but the economy for the better part of the year was at a standstill—hardly inspiring for those who were laid off or who remain poor.

Two reports we ran yesterday indicate that the worst is far from over.

In its latest run of the Consumer Expectations Survey, the Bangko Sentral ng Pilipinas (BSP) said that confidence has slumped since October, and is likely to remain subdued well into the first three months of next year.

The BSP said sentiment weakened in the fourth quarter this year, with most respondents fearful that the damage caused by typhoons Ondoy and Pepeng would lead to price spikes.

The poll results came a week after the National Statistics Office said that inflation shot up to a six-month high of 2.8 percent in November from 1.6 percent the month before.

That is why official reassurances about the year-on-year decline in inflation are not much of a comfort for ordinary Filipinos either.

What’s to celebrate about steady prices if you have nothing to spend.

Increase in poverty

An Asian Development Bank (ADB) study pretty much captures the Philippines’ state of disrepair.

The regional lender said poverty reduction in our country lags behind neighbors, including—and here’s the shocker—Cambodia, Laos and Vietnam.

Worse, in our region only the Philippines recorded an increase in the absolute number of poor people since 1990.

The lender scored the government’s lack of a long-term strategy to address poverty. It said the Philippines lacked quality employment, suffered from income inequality, a high population growth rate, and long-standing conflict in various areas.

This brings us to a recurring concern as we approach the May national elections: We should compel the presidential candidates to flesh out their vision and strategies for lifting the country out of its present rut.

As the PSE disclosure indicated above—which the ADB study confirmed—there is so much money made in the upper echelons of Philippine society and so little trickling down to the majority.

Something must be done to address such contrast in economic welfare: The presidential hopefuls must be made to disclose their plans so we can separate the charlatans from those who have a sensible grasp of what needs to be done. –Manila Times