December’s just another month - DEMAND AND SUPPLY by Boo Chanco

I may just be a sentimental not-so-old fool. Excuse me for recalling the times when I was growing up in a working class section of Paco, Manila. In those days, December meant Christmas and Christmas meant joyful celebrations. November, in fact, built up the excitement of anticipating the festive season. And you felt the spirit in the air. Now, all you can get from the air are noxious fumes.

We were bemoaning the loss of the Christmases we knew one afternoon the other week at Myther’s & Friends, the tailoring shop off the Remedios Circle where lunch is served every Thursday. I haven’t been there for more than a year but I decided to drop by to see what’s cooking. I found out soon enough that I wasted an hour of heavy traffic to get to Malate to hear pretty much the same thing they talk about in coffee shops elsewhere: Pure unadulterated despair.

The son of one of the country’s most dynamic entrepreneurs who is into prawn farming, electronic assembly and distribution and even cable television and internet was there. He said that most of their businesses in the country are flat or in decline.

It is their offshore businesses, in Hong Kong and China that are doing well. It was lucky, he said, that their electronics assembly operation in Clark had a neighbor that needed expanded facilities. Otherwise, their workers would have been out in the streets.

I moved to another table to join this socialite who lives in North Forbes. I wouldn’t say she is opposition oriented since she is actively helping the Estrada family or one of them anyway. But she too agreed that we are living in tough economic times.

I thought of her when I saw the headline of Community Magazine entitled: "For Rent: The new sign of the times." This North Forbes socialite told me the exact same thing. These are not happy times in the exclusive villages. The expats from multinational companies have left the country and many houses in Forbes, Dasma, Urdaneta, San Lorenzo, Bel-Air, etc. have been dark and empty for a while.

What makes things difficult for many of the house owners is that they have grown dependent on rental income to sustain their lifestyles. They have been renting out their homes and they have bought condo units for themselves. Now with the high interest rates and the loss of rental income, they find themselves between a rock and a hard place.

My North Forbes socialite confessed that she herself, had to lower her asking rate for the properties she is renting out. She just wants a tenant to take care of the hefty association dues and see to it that the properties do not deteriorate. Many of her friends have even gone to the extent of selling some of their jewelry to help them through these tough times. I should remind myself never to scoff again when we talk of parasitic rent seekers, in the economic sense. Apparently, Erap has made it tough to even be one.

Could this be why there is a thriving jueteng operation in the Forbes and Dasma villages? I remember reading this information from a member of Pete Lacaba’s e-group. Apparently, the sekyus are the cobradors in this betting racket. The initial impression I got it was just the sekyus, the drivers and the maids who are into it. Wouldn’t be surprised if the amos are in it too. And who’s protecting jueteng in these ritzy villages?

Anyway, the Community Magazine, a full color glossy apparently sent free to selected individuals, observed in its lead story that there is a "very large number of for rent signs on house after house along most of the well-paved streets." I guess, a more revealing scene in at night when the blacked out homes stick out as signs of the times.

As what happens when supply outstrips demand, rents have also come down. A ‘trick’ of the trade, Community Magazine reports, is to offer several months free for a signed lease contract for a certain period of time. "This allows the owner to assert that the rent is not any lower, when in reality it is."

This is now common for residential as well as business rentals.

I heard that the Kuok managed building where the old San Miguel building used to stand on Ayala Avenue is offering a year free for a four-year lease. That is one really beautiful world-class building. But that’s the way things are. As we previously reported here, Citibank just sold one and a half floors in Paseo de Roxas to the Siguion Reyna law firm for just P35,000 a square meter. I am not surprised that the Community Magazine reported that someone actually rented office space in Ortigas Center at P45 per square meter.

Another bad sign, the Community Magazine reports, is The Fort. Not too long ago many entrepreneurs opened restaurants there with a lot of fanfare. It was the ‘in’ place for night life. Now, the Community Magazine reports, it is very forlorn. "The first to go was Mondo. Fat Willy’s is closing as are Big Boy and La Strega. Soon the only viable place will be Le Souffle which still enjoys a faithful clientele."

But the magazine is not without some good news. Those who stay behind may be able to discuss rent with a more reasonable landlord. The days of one year in advance, six months deposit just might be gone.

Incidentally, the administration apologists shouldn’t crow too much about the supposed growth in the GDP, GNP figures. As Ces Drilon’s late evening business newscast pointed out last Tuesday, it is nothing to be proud about. One of the reporters of Ces pointed out that we are now the slowest growing economy in the region, slower than even strife torn Indonesia.

And as the economic analyst of my stockbroker puts it, "An estimated 6.0 million Filipinos helped push net factor income from abroad (NFIA) by a whopping 20.3 percent, preserving the average Filipino consumer’s purchasing power." In other words, our OFWs saved the day again. And our politicians won’t even give them the right to vote.

For now, forget Christmas. December is just another month.

Not credible

Reader Rey Taningco e-mailed me his comment on last Wednesday’s column.

I agree with your comments regarding Pardo’s statement. I’m not really sure about the CB governor. In July when the dollar was P41 he said people will get burn if they buy. Two months ago when interviewed he said people must be dreaming if they expect the rate to be around P50. I thought these people studied economics in college. Both of them should resign ‘coz they’re no longer credible.

I know what you mean. I believed Paeng Buenaventura when he told me some months ago that the peso will get back to the P44 level or even better. So, I didn’t move, causing a substantial loss in the value of the little I have been trying to accumulate for my retirement funds. Buti na lang, that’s many years down the road pa so baka puede pang bumawi, after Erap’s gone.

Banana Republic

Got this txt message on my cell phone.

Q: Why is the Philippines called a banana republic?

A: Because it has sagging economy and we have a bunch of monkeys running government.

(Boo Chanco’s e-mail address is [email protected])