CITY OF SAN FERNANDO – With 2023 falling short of its promise as “transition year” of the economy from the impact of the Covid pandemic, a Pampanga business leader looks at 2024 with “cautious optimism.”
“We had a good trajectory for economic recovery at the start of 2023, but then several factors both internal and external practically held everything back,” said Pampanga Chamber of Commerce and Industry past president and current director Rene Romero.
Foremost of the external factors that had adverse effects on the Philippine economy were the Russian invasion of Ukraine that has turned into a full-blown war, and the current Israel war on Gaza, Romero noted.
“Unfortunately, those factors have not only transitioned to 2024 but were even aggravated by other issues,” noted the president-chairman of the Romac Group of Companies during the Balitaan at Talakayan media forum of the Central Luzon Media Association-Pampanga Chapter held at the Hotel Gracelane here on Jan. 11.
He cited the high inflation rate as a “principal challenge” for businesses.
“The purchasing power of consumers and the general profitability of businesses can be impacted by rising costs for goods and services. High production costs can have an impact on a company’s profitability, limiting its capacity to remain competitive and make adequate investments for growth,” Romero said. “Hence, the critical need for the government to arrest inflation and ensure price stability.”
The El Niño phenomenon is another “daunting challenge” facing the nation, he said. “Agricultural production is in peril. Crops – from rice, corn, to vegetables, not to mention fruits – cannot survive in severe case of El Niño which is expected to linger up to the 3rd quarter. But its lasting effect can be felt even until the 1st quarter of 2025.”
“Food prices and supply chain stability will be severely compromised here,” Romero said.
High bank interest rates are also a challenge to businesses, particularly manufacturers, he noted. “Banks say that have readily available funds but there are no takers, taken aback as they are by high interest rates. Business expansion projects are put on hold.”
Rosy picture
“The government forecast of one- or even two-digit growth rate for 2024 is overly optimistic,” Romero said. “The bottom line is: Will this cascade to the country sides?”
Government should not, Romero cautioned, “announce rosy projections on the economy that will only result to the people’s disappointment when it fails to achieve them.”
“It’s okay to say that 2024 can be even a greater year, if the restraining external and internal factors are contained,” Romero said. “The people should be given the actual situations on the ground and how government is doing about it.”
