This despite challenges natural and man-made
THE SUCCESSIVE earthquakes in early October spawned a wave of “end of the world” predictions. The leaders of our Holy Catholic Church called for a return to prayer and made a plea for mercy. After all, the quakes were most definitely of significant intensity — enough to shake not only the ground and edifices but also our faith. These quakes came in the wake of a series of strong typhoons in July and September and presaged even stronger storms just this November. The damage to life and property has been truly devastating.
I am tempted to say that these natural calamities are the physical manifestation of the extraordinary exposés that have drawn the ire of the nation in the past 100 days or so. Reportedly extensive and deeply rooted irregularities within the halls of government have shaken the trust of people in the very institutions that are supposed to look after our welfare and the public interest.
Indeed, for those whose love of country is paramount, the revelations of supposed widespread abuses are resulting to much agony and hurt.
Public opinion continues to crest on all the possible unintended fallout of recent events. While this may result to heightened levels of uncertainty in the business community, I am encouraged by the still relatively strong showing of the economy. Admittedly, gross domestic product (GDP) growth in the third quarter of the year was reported at 4%, lower than the previous quarter’s growth of 5.3% and the lowest since 2021. While disturbing, this is not surprising due to the erosion of public trust. This may have led to slower personal consumption and (government) investment spending. I take comfort in that this was triggered mainly by political events than any real erosion of economic fundamentals — save for those wrought by the spate of natural calamities.
In itself, the drop in GDP growth might seem disconcerting. However, a recent report by Nikkei Asia cited that “four of the six largest economies in Southeast Asia have reported slower year-on-year growth in the July-to-September period.” Thailand’s GDP dropped to 1.2% in the third quarter from 2.8% in the previous quarter. Singapore slid to 2.9% from 4.5% in the second quarter. For Thailand and Singapore, slow manufacturing output was seen as a key factor in the deceleration of economic growth. In Indonesia and the Philippines, a slowdown in private consumption was a significant contributor to slower GDP growth. Indonesia GDP fell slightly to 5.04% from 5.12%.
Malaysia’s GDP growth, though, accelerated in the third quarter to 5.2% against 4.4% in the prior quarter. This was triggered by a rise in mineral resource exports. It is worth noting, however, that private consumption dropped to 5% from 5.3%. Vietnam remains as the strongest economy in the region, sustaining growth of 8.2%, up from 8.0% in the second quarter. Its economy has been firing on all fronts — manufacturing, construction, and service.
To my mind, a 4% GDP growth for the Philippines in the third quarter is, after all, still quite respectable and strong. The hope is that the political strife will be resolved sooner rather than later so that our solid fundamentals can get the economy back on track.
Undoubtedly, the automotive sector is not immune from the slowing economic activity. Mainly, however, this is more directly attributable to the deferment of consumer durable purchases wrought by climate disturbances. Short work weeks resulting from typhoons and the reprogramming of government spending towards relief activities have weighed on car sales in the affected months and areas.
In fact, the latest sales report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) showed that sales of 40,014 units in October grew by 4.8% versus September. This is a welcome sign that demand for vehicles is still resilient. As we head into the yearend holidays, car purchases are expected to experience a seasonal bump from increased remittances from overseas, a rise in consumer spending, and aggressive sales promotions from auto retailers. Hopefully, political anxieties will abate with a focus on reform and the longer-term outlook.
On a year-to-date basis, CAMPI announced sales of 384,566 units, a flat performance versus the same period last year. Five of 12 member-companies reported flat or better sales — including Kia (up 31%), Suzuki (up 9%), Honda (up 5%), Toyota (up 4%), Isuzu (up 3%) and MG (up 2.5%). Mitsubishi reported flat growth.
If non-CAMPI car companies are included for the January-to-October period, it is estimated that some 20,000 units will be added to total market sales, resulting to a growth of around 4%. This reflects the underlying strength of motorization especially in the provincial areas where sales expansion outpaces the National Capital Region (NCR). It also captures the rise in demand for electrified vehicles.
It is heartening that our economic fundamentals remain solid. Some say not for long, but I sense that we may be underestimating our demographic and inherent strengths as a country. If there is one word that has described our economy through every disruption — natural calamity, political upheaval, global or regional contagion — it would be “resilient.” Yes, as a nation we thankfully have an uncanny ability to bounce back.
