These are the buzz words these days - Global Economic Crisis. I really yearn for the days that I am out at sea, away from the TV, internet, radio or even group talks about ANY crisis. Now, being land-locked, that is all I am hearing, everywhere I go. Even if I don't like it, I force myself to listen to the somber news. I have family in Canada and in USA, so I try to stay updated. I do feel for them, but on the other hand, I also know this will pass and the economic vicious cycle will start again. I went through this in the early 1980s in Canada and still remember paying a 21% mortgage rate. Ouch! In hindsight, I am thankful for this because I learnt a very important lesson then. It happened again in the 1987 - 1990s, but this time it affected my employer company in Norway. Norwegian banks had to be bailed out by the government at that time, and real estate if I recall right was to blame. Then you have the Asian crisis in 1997, also involving real estate greed. Now - this global economic crisis. Don't people ever learn?

But, I read that Philippines has learned from the Asian crisis. I really hope so. I started checking on economic indicators and so far, not too bad. According to The Economist, Philippine Real GDP in 2008 is 4.5%. Not bad, at least it is not negative. It is forecasted to drop to 3.9% in 2009 before it starts growing again in 2010. Consumer price Inflation rate is very high though. In 2008, it is at 9.7 but is forecasted to start dropping in 2009 to 7.0. In line with the inflation rate, the lending rate is forecasted to remain high 2008 to 2010. The Peso exchange rate to US$ is expected to be 47.18 at year end 2008, 48.50 end of 2009 and 46.25 end of 2010 (looks stable enough).

Then I checked the Bangko Sentral ng Pilipinas (BSP). The core inflation rate started at 3.4 in January and was at 7.8 in October this year. This seems to be in in line with the report of The Economist, so I would naturally assume that inflation will remain high to 2009. But inspite of the major increase in inflation rate, the increase in bank lending rates has been slight due to BSP's conservative policy of maintaining price stability.

What I was really more curious about is how the Global Economic Crisis is affecting the remitances of the Overseas Filipino Workers to the Philippines. I only found information to the end of August. It seems like from January to August of this year, the total remittances peaked in May/June and has started to fall slightly. I am not sure if this is season related or not. But overall, compared to the same period last year (2007), the TOTAL remittances increased by 17.16%. Canada had a whopping increase of 123.61%, USA = 15.29%, Europe = 13.3%, Middle East = 5.34%, Asia = 14.24% (but China showed a negative of 41.95%).

As for Davao, I look around and see a lot of developments going on, and read of more due to start soon. More malls, more condominiums, more subdivisions. Makes you wonder if anybody here is reading the news on what's happening out there. But based on the statistics above, I really do not think that we are affected much like it is elsewhere in the world. I actually think the crisis happening there is helping the boom here. For one thing, when Filipinos suffer the pinch, they end up wanting to repatriate. Why? Because of the low costs of living. The peso goes a long way compared to the US$ or Euro in purchasing power. Secondly, it is the Filipino trait to invest in real properties as a hedge. Wanting to own their own homes for themselves or for their families is well embedded in them. If they save money, it is geared for that dream of owning their own house. Lastly, the aging OFWs. They are starting to think of retirement and retiring back home or having a second home here as a back up may be their dream.

So, what do you think?