Presidents Report 2009
PRESIDENT'S REPORT - 2009
Before the third quarter of 2008, people were talking about economic difficulties, but not many expected a “financial tsunami” of such a magnitude to hit the whole world towards the last part of the year. In fact, when the world leaders gathered in Beijing for the opening of the Olympic Games on August 8, 2008, everybody was so jolly and optimistic. No one seemed to have foreseen any crisis in the making. Suddenly, Lehman Brothers collapsed in September 2008, triggering a domino effect on other international financial and investment institutions. Under the pretext of globalization, the big quake in Wall Street had caused a worldwide tsunami, and the big waves engulfed numerous investors and establishments from all corners of the world, even pushing some sovereign states to the edge of bankruptcy and causing certain European governments to fall.
The seriousness of the financial tsunami was beyond the speculation of most investment and financial experts. Who would have expected prestigious investment bankers like Lehman Brothers and Merrill Lynch to just vanish like smoke, and financial giants like AIG to become insolvent that the government had to come to its rescue? Who would have expected the share price of Citigroup to drop below US$1, and big-time manufacturers General Motors and Chrysler to apply for bankruptcy protection? As what is said, when the United States sneezes, the whole world catches cold, and now the United States is suffering from pneumonia, thus the G20 leaders had to rush into summit conferences to plan out ways and means to save the world from suffocation.
Luckily, the Philippines is least affected by this financial tsunami. While other neighboring countries are suffering economic turmoil and even experiencing recession, the structure of our economy enables us to stand firm after the big quake. The Joint Foreign Chambers of the Philippines recently came out with the statement that the economy of the country is not expected to slip into recession this year. In a report released early this month, the Chamber said that the strong remittance inflows from our overseas workers and the revenues generated from the information technology services sector will support the continued growth of our domestic consumption, allowing the gross domestic product (GDP) of the Philippines to recognize a positive growth in the year 2009.
Nonetheless, the local business community has to prepare for the worst while hoping for the best. Literally, the Chinese term for crisis (Wei Ji) means danger and opportunity. We have to take that kind of philosophical teaching and look at this worldwide financial crisis as a danger that requires our extra precautions, and at the same time an opportunity to move forward and expand our horizons for development.
Your company, Mabuhay Holdings Corporation, is working along this line of thinking. We are taking cautious steps and closely observing the changing conditions in the domestic and international business communities. At the same time, we are exploring growth opportunities for the group in this peculiar environment. At present and in the immediate future, we shall support our subsidiary, Interport Resources Corporation, in the consolidation of its land holdings in the Province of Rizal, and in the development of medium-class residential subdivisions to cater to the demands of the overseas workers and their families. In line with the fulfillment of our social responsibilities as a listed company, we are also drawing plans together with Interport for the creation of some low-cost housing projects. With the paramount objective of improving the housing needs of the common masses in mind, we are targeting the cooperation of the government housing authorities and may even seek their support in this regard.
Although the year of 2009 is a year of uncertainties and great challenges, the management of Mabuhay Holdings Corporation is very positive that it will be a fruitful year for its shareholders.
Esteban G. Peña Sy
10 June, 2009