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Why does it always have to be the fourth quarter?
I remember when the most exciting and heart-pounding fourth quarters happened only in basketball. Like in 2015, when the Golden State Warriors overcame a 20-point deficit against New Orleans, thanks to a three-point basket by Steph Curry that effectively tied the game at 108. They sealed that game at 123-119. Golden State went on to win the NBA Finals against the Cleveland Cavaliers.
These days, I find myself looking, with the same amount of concern, at the country’s fourth quarter, which officially began last Oct. 1. It was unfortunate that just as the Philippines looked like it’s starting to live with COVID, the tension between Russia and the Ukraine escalated and the US decided to further raise interest rates to tame inflation in their country.
If it sounds like déjà vu all over again, it is. Last year, on the advice of the experts from OCTA Research, we pressed for a lockdown in August to save the fourth quarter. We were very fortunate to have had on our side the MMDA; under the leadership of now-DILG Sec. Benhur Abalos, Metro Manila mayors cooperated with an NCR lockdown.
It was gratifying to be proven right. Our fourth quarter 2021 GDP numbers showed a better-than expected 7.8 percent growth, and an even more impressive 8.3 percent by the first quarter of 2022.
Can we do it again?
We are facing headwinds. Very different ones this time. In 2021, we had an important variable that we could control: vaccinations. Through the public-private sector initiative A Dose of Hope, we had the vaccines in time to ride the Delta wave and vaccinate enough people to spur mobility in the fourth quarter.
This year, there are fewer variables we can control. We cannot control the rising prices and rising interest rates brought on by the actions of the US. We cannot put a stop to the conflict in Russia and Ukraine, and are helpless against the pinch on supply chains and the uncertainty in economies around the world.
What we can control is our willingness to keep the economy going. Right now, the euro is at par with the US dollar and British pound. Revenge travel is happening and it’s being made easier by restrictions easing up. Other countries with tourism-dependent economies know this, and they know well enough to stay ready to receive visitors with dollars to spend. The Philippines has to keep up with that greater mobility all around the world. When you have more mobility, you have economic activity.
In a similar vein, the investments that resulted from the President’s US visit will not be felt until months from now, so we have to make sure our economy will be strong enough and ready when these investments start flowing in.
Mobility has to be maintained to ensure that the country’s economic recovery does not stall, especially during the holiday season when consumer spending is expected to be at its peak. The fourth quarter of 2022 will be crucial for the country’s MSMEs in particular. Unlike big corporations, their working capital lines are not fixed. Swings in interest rates affect them more severely. Many MSMEs make the bulk of their sales during the fourth quarter; that’s why it’s so important to keep things moving so that they will have enough earnings to cross over to 2023 and regain their momentum at the start of the year.
We in the private sector are doing what we can to mitigate the effects of rising prices so that the economy remains active throughout the holiday season. The medical community never ceases to remind Filipinos to stay vigilant against the virus, especially now that students have returned to in-person classes and outdoor masking rules have been relaxed. Meanwhile, the manufacturing sector is trying to cushion the blow to consumers. Although commodity prices have been rising, we pass on the increases to the consumers slowly so they do not get shocked by the inflation. Stagflation remains the enemy, so we have to encourage people to carry on.
That’s why I believe we should postpone the implementation of work-from-home arrangements to next year. By then, it is hoped that prices will have stabilized and mobility will not be as critical to economic activity as it will be in the final quarter of 2022. Employees returning to offices is now all the more critical considering that business from POGOs can no longer be counted on. This makes it so important to solve transport issues right away.
We are facing strong headwinds, but there are things that can help us sail through and come out with a strong economy in 2023. Hopefully OFW remittances will continue to buoy the economy, seeing that already the strong dollar is adding 10 percent to the value of dollar remittances.
It is the MSMEs that we have to attend to, as they – like the children, the unvaccinated and the immunocompromised back in 2021 – are the most vulnerable. And yet they are such a big driver for inclusive economic development in our country.
With hope, 2023 will see a resolution to the global upheaval – economic and political – and we’ll be able to predict things with more certainty.
That final push, with just the right amount of adrenaline that helps people power through the impossible, is crucial when it’s down to the wire. It is these classic comebacks that make any fourth quarter worth fighting for.