When Uncle Sam sneezes, the whole world catches cold
When the US economy sneezes, the world catches a cold.
The reason for this is that being the biggest economy in the world, the United States most likely have trade and investment relations with almost all countries. That doesn’t spare the Philippines. Ever since our country has been colonized in early 20th century, the Americans hold most of our economic activities.
America has been sneezing a lot lately, with its housing sector reflecting the virus most prominently. This translates to slower consumer spending, which in turn slows down performance in much of the rest of the US economy.
It’s the US that is being blamed for high energy and fuel costs. Their thirst for fossil fuels are unquenchable. Our country doesn’t rely much on oil for our energy needs except for transport sector which is solely dependent on it. So for every dollar increase in oil price on the world market, it translates to a higher transport cost. The domino effect continues.
Even the current US presidential elections touches us in more ways than one. I have not seen such huge interest Filipinos have about the Obama-Mccain contest than in recent years. Whoever the US decides, it’s his foreign policy, immigration and illegal aliens issues and care for war veterans that we should be wary about. The US remains the top destination for Filipino overseas workers.
With the recent mortgage crisis and Wall Street disaster, our country cannot escape from this debacle unscathed. Being a member of Association of South East Asian Nations (Malaysia, Singapore, Thailand, Indonesia and the Philippines), the United States remains among the two biggest buyers of our exports. However, recent data shows that it is not the Philippines but Malaysia that now has the greatest export dependence on the United States, which buys one-fifth (19.5 percent) of that country’s merchandise exports.
It’s a good thing that the Philippines was able to reduce its trade dependence on the United States since the 1990s. Before, Uncle Sam took 38 percent of our merchandise exports, with Japan a far second at 19.8 percent. China was nowhere in our foreign trade radar then, taking less than one percent of our exports at the time. Now, it has dislodged the United States as our biggest export buyer, accounting for one-fifth (19.5 percent) of our own exports, against the United States’ 16 percent. So it is China’s sneeze that we need to be more cautious about.
Our school for the deaf will be celebrating its 15th year this October. Ever since we are founded in 1993, we have been moving from one rented building to another. We constantly pray for a place where we can call our own and really establish a more stable ground. This couple of years, God has blessed us with good financial standing and the desire to expand is within our reach. Sadly, we are affected by this sudden downturn of the world’s economy. A darker cloud looms above the horizon. Should we continue or should we wait for calmer seas? That has been the question most of the businessmen currently ask. But must we succumb to this threat? I pray not. 🙂