CEBU, Philippines - While Japan has fallen into another recession, a Cebuano business leader said it is not likely to affect the Philippine economy.
Cebu Business Club president Gordon Alan "Dondi" Joseph believes that the Philippines will still continue to enjoy its projected economic upswing amid the recent economic struggle of the Japanese economy.
"We have survived and prospered while Japan had been in recession for decades," said Joseph in an interview yesterday.
Prime Minister Shinzo Abe announced on Tuesday a delay in a second sales tax hike a day after Japan stunned economists when the country unexpectedly fell into recession.
Abe also called for a snap election in a bid to get the public to back his "Abenomics" package of economic reforms. The move comes after the Bank of Japan surprised the global financial markets in October by expanding its massive stimulus program with more quantitative easing in an effort to reenergize the struggling economy.
Joseph said Japan has been in recession aside from "small positive shirt term blips," for decades and they are aggressively still pursuing investment opportunities in countries like the Philippines, "they need to do so to help spur their economy."
The world's third-largest economy is facing two problems: An imminent sales tax hike in the short-term and with fewer young people than old, the nation has an aging population that is dragging the economic growth.
Economists theorize that Japan’s inverted age pyramid may explain why its economy has failed to respond to stimulus measures, a report said.
Japan’s gross domestic product figures on Monday came in weaker-than-expected for the July-September quarter, and Japan contracted at an annualized 1.6 percent rate, compared with forecasts of a 2.1 percent gain, according to analysts polled by Reuters.
The Bank of Japan is scheduled to announce its latest interest rate decision on Wednesday, followed by a press conference from the Bank of Japan discussing the country’s current monetary policy.
In economics, a recession is a business cycle contraction. It is a general slowdown in economic activity. Macroeconomic indicators such as GDP (gross domestic product), investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise.
Cebu Chamber of Commerce and Industry president Ma. Teresa Chan said that although the recession would affect partly of the Philippines' strengthening economy, as it will definitely cause a dent in the country's projection.
"Fortunately, for the Philippines, there are other rising economies which we started to partner with and can also be developed," Chan said. (FREEMAN)