Oct

31

The financial crisis continues to spread over the world’s markets like fire, burning down investment houses and charring stock values.

 

 

The US government has been bailing out national funds in order to keep its economy and assets, “liquid”.
Governments and private bodies in Europe and Asia are doing similar efforts in cutting down interest rates before there is too much damage to recover from.

In India, corporations are implementing cost cutting measures one would describe as almost drastic.

They have completely rewritten the book on cost-cutting from removing guest luncheon coupons, to not utilizing color printers, to having employees make their own travel arrangements even on business trips, to not supplying toilet paper in their washrooms.

Due to the spreading credit crunch, narrowing profit margins and pressure from rising costs, companies in India are adopting an austere, almost Spartan way in doing day-to-day business in their offices.

Employees ’sacrifice’ in terms of comfort and convenience, which also includes shutting down air conditioning for at least two hours a day to reduce the electric bill.

It is forecasted that these cost-cutting measures would be the status quo for at most a year but that’s only the positive outlook. Some industry insiders perceive the effects of the global financial crisis would weather on for 4 more years.

Major cuts have also been occuring in the US and China but in terms of their key interest rates which resulted in stock surges within every stock market in Asia.

This may help stave the the possibility of prolonged recession and be beneficial to many countries, especially the Philippines.

According to the country’s Central Bank authorities, the interest cuts would favor the Philippine economy in greater flexibility and breathing room in implementing its policies.

Seeing that the country’s economy is safe harbor against the meltdown, trade and industry chambers from the US, Australia, New Zealand, Canada and Europe renewed their commitment and support of the country’s small-to-medium enterprises (SMEs).

National statistics show that SMEs comprise 99.60 percent of all registered firms in the country, employs 70 percent of the national labor force and contributes 32 percent of the country’s GNP which are exported as valued commodities to foreign markets.

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References:

  1. “Foreign chambers vow strong support to country’s SMEs.” 31 October 2008. The Manila Bulletin. Accessed 31 October 2008. Link here
  2. Ferriols, Des. “US Fed cut seen to boost RP economy.” 31 October 2008. The Philippine Star. Accessed 31 October 2008. Link here
  3. Plumberg, Kevin. “Asian stocks surge sharply after rate cuts.” 30 October 2008. Reuters via the Manila Bulletin. Accessed 31 October 2008. Link here
  4. Puri, Mahima & Deepshika Monga. “Corporates pull out all stops to cut costs.” 31 October 2008. The Economic Times of India. Accessed 31 October 2008. Link  here

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