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Effects of global economic crisis in the philippines

admin — Thu, 16 Sep 2010 00:46:43 +0000

effects of global economic crisis in the philippines

a phase in the capitalist cycle in which the basic proportions of reproduction that have been disturbed during the development of the capitalist economy are forcibly restored. Economic crises are manifested in such economic disruptions as an absolute decline in production, a curtailment of capital investment, a rise in unemployment, an increase in the number of bankruptcies, and a fall in the price of stocks.

The 2008 global economic and financial crisis spawned a synchronized recession among industrialized countries leading to a contraction in world trade. Exports from developing countries fell sharply dragging many of them into the global economic downturn. The Philippines was not spared the fallout from the crisis as GDP growth decelerated considerably in the fourth quarter of 2008 and first half of 2009. Asset prices experienced volatility but unlike the 1997 East Asian crisis, the financial sector remained fairly stable. Unemployment increased moderately, but was more pronounced in the manufacturing sector which felt the brunt of the slowdown mainly through the export channel. Remittances from overseas Filipino workers continued to grow, however, albeit at a lower rate. Foreign exchange reserves therefore maintained an upward trend despite the fall in exports and larger capital outflows.

A cause of concern is the widening fiscal deficit, which is largely due to the need to increase government expenditures to offset lower consumption, investment, and exports. The Economic Resiliency Plan is a key component of the government’s response to the crisis and 2009 first half data indicate modest success. However, another factor behind the wider fiscal deficit is the weak tax effort and if this persists, the resources to finance achievement of the Millennium Development Goals will likely be reduced. Thus, even if preliminary survey data derived from the Community-based Monitoring System indicate a moderate adverse effect on the income and employment of lower income households, lower economic growth and fiscal troubles imply that the government will not have enough resources to improve their situation in the medium term. This is definitely a problematic scenario given that the poverty situation in the Philippines deteriorated even when economic growth was relatively robust. To its credit, the government embarked on a campaign to increase and expand social protection in response to the deteriorating poverty situation. In the wake of the crisis, resources were increased and programs were improved. However, many social protection programs continue to be hindered by low coverage and inadequate benefits, poor targeting, and operational constraints due to lack of coordination among program implementers. This is a microcosm of the institutional problems that have constrained economic development in the Philippines over many decades.

1 . Introduction
While analysts and observers focussed on the effects of the crisis on economic and financial indicators, an equal but pressing problem that was not been given prominent attention was the social effects of the crisis. Yet, the Asian crisis was more than a financial crisis, it was also a social crisis. The increase in prices of goods and services, company and bank lay-offs and cuts in social expenditures, severely affected society in general, especially from the poorest sectors of the region. In the Philippines, as during the previous rounds of recessions in the economy, the marginalized sectors usually shouldered the cost of the restructuring. Thus, the recession may further affect the levels of long-term social and human development and increase the levels of poverty and inequality. Also, a major feature of the crisis was the number of company closures, bankruptcies, and consequent lay-offs. The labour sector was therefore, one of the most affected sectors. This paper focuses on this particular aspect of the crisis ± labour markets – and will examine the channels through which the labour sector was affected by the slowdown in the economy. More specifically, the effects of the crisis on the various dimensions of the Philippine labour market, including the levels of labour utilization, productivity and wages will be examined. Finally, the paper will trace the responses of the government, business and trade unions to the crisis, and make an assessment of the sufficiency of these responses. A review of the macroeconomic and social effects of the crisis will precede the discussion of the effects of the crisis on labour markets in order to provide the context for the situation in the country.
2. Brief Review of the Macroeconomic and Social Effects of the Crisis
Although the Philippines was not as badly affected by the Asian financial crisis in comparison to other countries like Thailand, Indonesia and South Korea, the crisis came at an inopportune time. The regional economic laggard for the past two decades, the country was experiencing moderate 5 to 6 per cent GDP (Gross Domestic Product) growth during the few years before the crisis and hoped to sustain that level well into the next century. Structural reforms in the areas of trade and investments were being implemented, while the deregulation of the goods and services market ( including the financial, telecommunications and transport sectors) and the privatization of state-owned corporations was being carried out. Prudent macroeconomic policies resulted in fiscal surpluses for the first time in two decades. Significant strides were being made to reduce poverty and the poverty incidence had declined from 40 per cent in 1991 to 32 per cent in 1997. The implementation of a comprehensive poverty alleviation programme and increasing opportunities for employment provided a foundation for the continued reduction in the number of poor households. However, the combined impact of the financial crisis and the weather disturbances the country experienced during 1997-98 effectively stalled prospects for continued economic growth and poverty reduction.

effects of global economic crisis in the philippines

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admin — Wed, 08 Sep 2010 07:32:47 +0000

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The effect of the economic Crisis on the global Shipping industry

admin — Mon, 12 Oct 2009 11:59:16 +0000

Introduction:
World Economy crisis – effects on shippingworld: a serie of linked financial and economydownturns that are badly affecting theshipping market:-Lack of financing for new projects andnewbuilding. Results: contracts cancellations,g,delayed deliveries, higher costs – Low chartering rates – low market values:longer return on investment for new and oldships.- Lowered assets values: vessel being deliveredhtk t l th t’h lhave a current market value that’s much lessthan building contract value.Ettt d f- Excess tonnage: recent years trend of a veryspeculative ships resale and newbuildingmarket Peak of conventional ships deliveriesmarket. Peak of conventional ships deliverieswas expected in 2012. Excess of tonnage offer.

The impact of the shipping industry has been severe. Check out symbols EGLE or DRYS, large shipping companies. The declines in these stocks over the late September early October has been severe.

Shipping industry will ride the storm of financial crisis
Dubai: As the turbulence of recent weeks has rocked the previous complacency that had become embedded in the fabric of a western society that the righteous have already dubbed as irresponsible, the marine industry has begun to batten down in preparation for rough weather ahead.

While the consumer world fattened itself on the produce of its spending, shipping, too, enjoyed a smooth voyage while it supplied the needs of the spenders, automatically reaping the benefits bestowed by the boom. Such is the nature of this business.