The US recession and its Impact on US

Arroyo has just called an emergency energy summit. She needs to. The threat of high oil prices will impact greatly on the country's economy. One of the things which this summit achieved is lower the tariffs imposed on oil prices. It was a decision which sectors have been wanting for Arroyo to do since last year when oil players jacked up petrol prices.

But what Arroyo must actually do instead of calling for an energy summit is an economic summit. Why? There is a strong possibility that the slide of the US economy into recession will affect Philippine economic growth this year. The high 5% unemployment rate and the sluggish pace of the economy will surely affect the flow of net foreign portfolio and foreign direct investments. Investors, both local and foreign, have shown nervousness and apprehension, not because of political talks, as what "eminent" stock analyst Astro del Castillo said yesterday. The Philippine stock market will perform poorly in the next couple of weeks or even months until this US recession boils over.

Surely, those companies involved in the call center, export and those closely linked with retail or consumer goods will find it extremely hard to compete in the US due to this recession. There will be less demand for locally-based call centers because companies in the US will surely slash their customer service budget. When things turn worse, companies look at their books and erase those which they consider to be dispensable expenses.

What I fear is the fate of fellow Filipinos in the US. Surely, with unemployment high, the first sector to be affected by it would be the minorities. There will be less jobs available for them. When this happens, some or many of them would be unable to send dollars into the country or worst, entertain thoughts of going back. The exodus of incoming expats would surely strain our own economy.

This early, questions about the resiliency of our economy are animating every boardroom and every coffee shops. People are edgy. And when people are uncertain about things, they are bound to do the inevitable--strategic retreat. I, myself, am thinking of pulling out certain investments linked with the stock market, for fears that the value of my money will be diluted due to this impending recession. I am not encouraging others to do so. But, if they assess the situation, they would empathize with me when I say this: When the sky is littered with dark clouds, it's time to rush to the nearest shelter for rain.