The Cebu business leaders has suggestion to deal with the unprecedented downgrading of the US economy from an AAA category to AA by Standard and Poor’s. Cebu business leaders suggested that “Invest in the domestic market. Strategize as an industry and not as individual players.” and “Put in place measures that will help cushion the effects of the recent credit downgrading of the United States of America.”
The Mandaue Chamber of Commerce and Industry.. Eric Ng Mendoza, said that “the downgrading of the US Credit Rate was a wake up call for all economic and finance managers to balance their investments in other lower risk, high liquidity instruments.”
Ric Ng Mendoza also said that “One must admit, however, that the AA rating is still a favorable investment in the grade category and still better than Europe’s debt problems,” It is still seen that the US is the single widest market in the world for exporters, Eric Ng mendoza said that “local exporters should also redirect trade to emerging countries like China Russia, India, and Brazil and our domestic market, which is a potentially large one. “
Mendoza said.. “It is best to invest in our own country. Now that there is strong renewed business confidence here, you can see our economy steadily growing fast. It’s time we look for opportunities in our country. We should develop and maintain a strong domestic market,”
The Cebu Business Club President, Gordon Alan Joseph said that “he believed the downgrading would not have a big impact on Cebu’s economy”.Joseph also staed “the downgrading could trigger a double-dip recession in the United States, which Cebu should be cautious about and should prepare for.”
A double dip depression excerpt to a depression followed by a temporary recovery followed by another depression. Joseph also said,“What will impact Cebu is a double-dip recession in the USA. It is possible but we must not underestimate the power of the US economy. Recovery is just a matter of time. A credit downgrade may just spur the USA to make tough decisions. They need to move forward. They are mired in seriously partisan policies,”
Even though, Joseph encourages the local exporters to achieve. “It is common to be complacent and I believe the exporters should see how they can work together to create a strategy to strengthen Cebu’s competitive advantage to create better economies of scale as an industry and not as individual players,” Gordon Alan Joseph said.
The executive director Fred Escalona of Philexport Cebu stated that “the US credit downgrade could cause US interest rates to increase which could also lead the Philippines to increase its own interest rates to close the difference.”
Fred Escalona also stated that “The BSP (Banko Sentral ng Pilipinas) has been evident in the inflation targeting policy and this could lead to a further appreciation of the peso which is bad for the export sector, BPO (business process outsourcing) and OFW (overseas Filipino workers) remittances,”
From the strengthening of the peso as well as Philippies importers will be benefit in debt servicing,fuel prices, and power rates.
“To cushion it’s effects, there is not much that the government can do. Some sectors in the government feel that a strong peso is good for the economy. What they can probably try is to use half of our US dollar reserves to accelerate payment of our foreign debts and openly buy the US dollars to replenish our reserves,” Fred Escalona said.
There is always a strategy or technique in evreything.. to have a success country everyone should share there oppinion on what should be done in the country so that the leader will think what’s the best. Importing in other country is a big help to each one of us because it helps the country and at the same time the people to have a better life.. We should think what is the best for the country not for ourself
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With US downgrade, traders urged to focus on local market
