FFCCCII Urges Government Action Amid Economic Woes

Even after President Marcos’ 5th State of the Nation Address last week that focused on key economic concerns of the business sector, the Federation of Filipino-Chinese Chambers of Commerce and Industry, Inc. (FFCCCII) continues to express concern about wages, a deteriorating peso-dollar higher exchange rate that is making imports for agricultural inputs more expensive, higher oil prices, expensive energy cost and the lack of investments. In an interview on the sidelines of the Anvil Business Club’s 35th anniversary and induction ceremony Saturday at the Shangri-La The Fort, FFCCCII president Victor Lim expressed the Chinese business sector’s continuing concern over the local economy. He said the economy remains bad, evidenced by the noticeable reduction in consumption by Filipinos and manufacturers struggling to survive amid continued demands for higher wages. These demands, coupled with fluctuating oil prices caused by geopolitical events, affect energy and transport costs — all contributing to inflationary pressure. Lim cited the concerns of some FFCCCII members about a noticeable drop in purchases of goods as more Filipinos try to cut their living costs. Steven Cua, executive director of the Philippine Amalgamated Supermarkets Association (PASA), speaking on behalf of local manufacturers, particularly the micro, small and medium-sized enterprises (MSMEs) struggling due to the higher cost of production, cited the lower buying power of Filipino consumers. According to Cua, members of PASA have noticed that Filipino consumers have tightened their shopping budget and are buying in smaller quantities. “There is a drop of the items people buy these days because they’re buying smaller packs — sachets — to fill in whatever they need for their daily needs... because you have to stretch the peso, right? Because of the increase in prices,” he said. He acknowledged that “there are so many factors at play, you know, increasing salaries, of course, with oil, gasoline prices... again with this up and down... power rates, exchange rate — because of our raw materials, will go up, and, you know, cost of production. Some of, or all these factors...people know that prices for sure will go up, right? So, you know, they’re tightening their belts and they’re prioritizing what they need to spend on because it’s not just food... you need tuition...” Because of the lower consumption or buying power of Filipino consumers, Cua revealed that supermarket owners are seeing less bulk sales. Goods and products, he said, are still being bought, but “they’re getting sold, but in smaller sizes, in smaller quantities.” Cua expressed the sector’s fear that “what’s frightening is that with this state that we’re in, some may not just, you know, cut down on costs, but may have to close down eventually. Some have told me they may close.” He cited one small MSME store, “There’s a small MSME store... it sells used books for sale. They used to have four stores, start of this year — four outlets. Now they’re down to... by middle of this year, they’re down to three. Now they’re one, and they’ll be closing that by the end of this year. That’s a very clear example of a business that’s closing down. And you know, slowly, they’re slowing down their operations because they really plan to close by end of the year.” Cua, particularly expressed concern for the supermarket sector, pointing out that “Well, basically, food, in our case, because our margins are so low, that’s why. So we’re bothered by what’s happening. And because what’s happening is it seems like the burden is on the shoulders of the private sector, the business sector, instead of the government, the public sector ... And we’re carrying the burden of increased taxes, increased additional regulations and increased Custom operations? That’s real salaries.” The supermarkets, Cua said, have already increased their prices, but it seems there is a move to suspend any increase... “the increase in price was supposed to take effect last Saturday, July 25, but was suspended. So we’ve already adjusted.” Cua expressed some frustration about PASA members having to change prices again. “We need clear signals from government, direction setting, so that we can all act together as one,” he said, stressing that the Department of Trade and Industry “can do a better job in creating the proper environment for investors as well for business confidence to increase, as well as for consumer confidence.” The PASA official welcomed the announced entry of some foreign supermarket players into the Philippine market. “Okay, that’s good news. The big boys don’t have much problems,” Cua said. However, he warned, “It’s the middle income — the MSMEs, which we want to help because they are the entrepreneurs, they are not hired, they are not employed, they are the employers, right? In this section, you know, mabawasan, matapyasan...saan natin pupulutin (if we reduce, cut, where do we get) additional revenues, from OFWs? Government, Cua stressed, “has to come up with proper conditions, economic conditions...for people to get into the business easier and to help them grow their business. He cited the need to help industries, even heavy industries, even smaller industries like salt, right? I mean, we import so much of that.. over reliance (on imports). So we need to develop our industries...something beyond a six-year term of any administration.We’re a new republic every six years, so we need to change that.” Finance Secretary Frederick Go was the keynote speaker during the Anvil Business Club’s 35th Anniversary and Induction Ceremonies, and hopefully listened to the Chinese business sector’s continuing concerns about the economy. In his remarks, Go encouraged business leaders to seize emerging opportunities in manufacturing, technology, infrastructure, agribusiness, tourism, logistics, renewable energy and other high-growth sectors.