This column has been projecting optimism and inspiration for the past year now.

In the past columns, I have mentioned that the financial crisis is still far from over. I even pointed out when the Dow was trading at the 12,000 levels that this would go down to 9,000. Well, it did. It even overshot to a low of 7,800.

Quite a number of entrepreneurs follow this column, as I continue to be optimistic for the Philippines and for Asia. But we also need to point out the risks clouding the whole world, which could affect us.

Vincy Zaragosa, a trustee of Philippine Center for Entrepreneurship – Go Negosyo, has been a regular adviser on this current situation. He runs a fund called Pentium Fund, based in France and he has done quite well. As early as last year, he has bought oil at the levels of 50 dollars and sold it at its peak. In a conversation I had with him a couple of weeks back, he said that the world could face a one year depression. When one hears the word ‘depression’, it sounds threatening. But Vincy says that there is a difference between the past depression and the situation we have today. Countries and central banks are taking a very proactive role in preventing a depression. They continuously think of ideas to bring back confidence in the financial market. I agree with his views.

I feel that the first part of 2009 will be very critical for America and the rest of the world. We have to admit that whatever happens to America, being a very large economy of consumers, we will get affected. As the saying goes, when the US sneezes, we catch the cold, but hopefully not the fever. When America starts to save more because of fear, this can actually make the situation worse. The savings rate of Americans is around four percent of their disposable income compared to the Germans with 10 percent and even higher for some of our Asian neighbors. Thus, a sudden reversal in demand can cause a bad recession, which can lead into a depression.

But hopefully, the increasing moves to help their financial system get back on its feet, establish confidence and resume credit flows would resuscitate what could have been a hard fall, or a depression.

What should we do in the Philippines?

I have always called for the government to cut interest rates. It is more important to continue helping the negosyantes to grow and expand even in times like this. Give more Filipinos a chance to own their own homes. For many years, due to a number of crises, Filipinos have held back. A low interest rate will allow them to afford the amortizations. Commodities have dropped. We will feel the effect of lower prices by next year as most manufacturers hedge out the buying till the end of this year and some first quarter of next year. But, inflation will definitely go down by mid next year or earlier. Oil has the biggest plunge and it will head towards the $60 to $70 range for whole of next year. This is the good news for the consumers. This is why I believe we should bring down rates. America will see low interest rates for next year, maybe at one percent or even below. With the temporary strength of the dollar, this could happen.

The passing of the new magna carta, which now includes micro entreps on top of small and medium, mandates a bigger allocation of resources. The percentage mandated to the banks to lend to micro and small entrepreneurs has been increased by two percent, from six to eight percent. This will definitely help build a stronger base of micro and small entreps.

Just recently I attended the annual search of the Citi Microentrepreneur of the Year Award. I was part of the National Selection Committee, along with Atty. Felipe Gozon, Fernando Zobel, Marixi Prieto, Antonino Alindogan Jr., Sanjiv Vorha, Hon. Amando Tetangco, Dr. Darwin Yu, and Tessy Sy-Coson. All of those nominated had very inspiring stories. They are the people who we need to help.

Many of them were forced into business because they can’t get a job and because they want to improve their lives. Big banks do not lend to them as they borrow amounts between five to 50 thousand pesos and require a lot of mentoring.

The MFIs, rural banks, and credit cooperatives are the ones that lend to them. Even pawnshops and the system of 5/6 still play a role here. These are their source of funding for a working capital. Over time, we need to see them move from micro to small and, eventually, to medium.

Based on the Global Entrepreneurship Monitor (GEM) Philippine Report by PCE, there is a wide network of financial institutions in the country, with 7,000 banks and 13,000 non-banks that includes pawnshops and financial companies. But, access to finance seems to be a major challenge. Three out of 10 Filipinos do not even avail of banking services. Thirty-six percent of municipalities have no banking offices. Loans from close relatives and friends are primary sources of additional funds for micro and small businesses.

This is the challenge for many entrepreneurs who joined Go Negosyo – the challenge to help these people. Similar to Gawad Kalinga, as they help build homes, Go Negosyo wants to help build a negosyos for those who aspire, but there are just so many of them out there. With the help of our entrepreneurs, sponsors, and media partners, one day we shall see a brighter entrepreneurial environment.

[For feedback, email me at gonegosyo@yahoo.com or thru SMS at 09175591245. For free business advice, visit www.gonegosyo.net. Watch the Go Negosyo Bigtime Show in its new home, QTV, every Saturday and Sunday 8 to 8:30 a.m., with replays in NBN every Sunday 9:15 to 10 p.m.]