BUSINESS journalists who attended the recent opening of the seventh branch of AllHome in Daang Hari in Cavite, my group’s one-stop home improvement retail unit, asked me how I was doing after leaving the political scene in 2013.
I answered that I’m now giving to business the same intensity I gave to politics, plus, of course, the excitement!
Recalling the interview, I believe my remark should be a good advice to other entrepreneurs, or those who are interested in establishing their own business ventures. I also believe I am in a good position to offer such advice, based on personal experience, after going from business to politics and back to business.
As I have been saying in the past two years, this is the best time to be in business in the Philippines, which has defied global crises and continued to grow while other countries fell into recession or slow growth.
When I rejoined Vista Land & Lifescapes, Inc., my group’s flagship real estate business, I quickly felt the vibrancy of the business sector, and the intensity of the competition. Businessmen who made plans several years ago are now finding out that those plans were just enough to sustain current operations because everybody continues to plan for the future even while previous expansion plans are still being implemented.
That’s how vibrant the private sector in the Philippine economy has become in recent years, because of the country’s strong fundamentals and improving investment climate, which has prodded global credit rating agencies to rank the country as investment grade.
The current thrust of Vista Land reflects this vibrancy. It has started venturing into other activities outside its traditional housing business. In previous columns I predicted an explosive growth in the retail business. This paved the way for Vista Land to go into retailing, which actually complements its housing developments.
AllHome, which is under Vista Land’s retail arm All Value Holdings, serves homebuyers in the Vista Land communities, as well as homeowners outside the company’s projects, and even other developers. In the next three to four months, AllHome will open other branches in Imus (also in Cavite, Sta. Rosa in Laguna and in Las Piñas. At least six other branches will open in Mega Manila next year. We also intend to expand the AllHome network to other regions, particularly in Visayas and Mindanao.
All Value, which already operates 24/7 convenience stores under the All Day brand, is also going into supermarkets and other retail businesses to take advantage of the consumer-driven economy.
My group is not alone in this expansive mood. As I said earlier, there is intense competition in the business sector. More investments are now coming in. Based on the Bangko Sentral’s latest report, net foreign direct investments (FDI) amounted to $5.7 billion during the period January to November 2014, up 61.6 percent from $3.5 billion in the same period in 2013. The 11-month FDI level was already more than the annual FDI inflow in previous years.
It’s fair to say that the intensity of the business sector is now fuelling economic growth. In his statement during the presentation of the official report on the economy last month, Socioeconomic Planning Secretary Arsenio Balisacan said that the government ramped up its spending during the last three months of 2014, to reverse the contraction in the third quarter. Private or household consumption consistently grew last year, from 5.9 percent in the first quarter, to 5.3 percent in the second quarter, 5.2 percent in the third and 5.1 percent in the fourth.
In contrast, government expenditure started at a slow 1.9 percent in the first quarter, stood still (0.0 percent) in the second quarter, contracted by 2.6 percent in the third quarter before rebounding to 9.8 percent in the fourth quarter.
The last-minute rebound put the full-year growth in government consumption at 1.8 percent for 2014, still a big drop from 7.7 percent in 2013. It also enabled the economy to breach the 6-percent growth mark in Gross Domestic Product (GDP), although short of the official target of at least 6.5 percent, and the 7.2-percent posted in 2013.
In the past, the government was expected to take the initiative, or provide the stimulus, to drive economic growth. In 2014, however, the private sector drove the economy. I believe it is imperative that the government ride on the vibrancy of the private sector to push the economy back on the fast lane beginning this year.
To be continued
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