I do not know if my title is passe, that is, should it be termed as the crisis of 2008? Anyway, what the Philippines is experiencing so far is an economic downturn. There is no full crisis yet. But like the rest of the world Filipinos are worried about the spill-over effect of the US crisis.
Will there be a full-blown crisis? I don’t know either. Nobody has a perfect crystal ball on this crisis. One thing, there is no denial complex like in the other crises so looking for solutions came earlier. And the host country of the crisis can possibly marshall up to a trillion dollars of intervention fund to soften the blow. And the world, tickled properly, will probably respond to multilateral efforts in order to stave off a greater conflagration.
How do the Philippines stand in this crisis? Firstly, electronics parts imports have dived indicating that this sector of the economy won’t be a good performer this year. But that sector is no longer the country’s biggest sector. The biggest is now the OFW market and this sector is not dependent directly or indirectly in the US since it caters mainly to the Middle East and this region doesn’t produce a lot of goods and services for the US and other highly-industrialized countries (HICs).
A major sector, the natural-resources extraction sector including metals is primarily China-driven now. Will this suffer? Actually it will depend on how China handles this crisis since their number one market is the US. But being the cost and price leader worldwide they still have plenty of option regions. But of course these regions economic size and purchasing power cannot match the US’.
Our agri-business sector can probably ride out the storm since more and more it is not dependent on the US market. Instead it relies more on Japan and increasingly the Korea, China, Hongkong and other markets are being developed.
Meanwhile, our traditional agriculture market, though still big had become more of a non-factor in the last few years. Our coconut, abaca, tobacco markets is no longer that important while we are importers in our other agriculture needs like cereals.
An emerging BPO sector, which include call centers probably ranks second in importance now. This sector is putting up a brave face but its primary market is the US. Will enough US firms cut cost and outsource abroad so that previous demand cuts here will be negated? I cannot speculate on this since this is a US response area.
I point all of this out since I do not want to say that this impending crisis will just be a replay of the 2001 crisis spawned by the 9/11 NYTC attack. The world changes fast and underlying dynamics do change.