It’s good to be optimistic about the new year, to hope it will be better than the year just past, but it behooves us to be realistic as well. Here’s advice from the Business Mirror columnist I follow, a Facebook friend. Read all of it here: https://businessmirror.com.ph/2024/12/30/the-coming-year-of-risk/
THE COMING YEAR OF RISK
John Mangun… Risk is defined as “a situation involving exposure to danger, harm, or loss”. But it also means “the probability of an event occurring” and “the impact that an event may have”. In 2025 we will witness increased risk in the broadest sense of the word; increased danger, increased probability of that danger occurring, and increased opportunities. This is across the spectrum of geo/local politics and governance and geo/local economics and commerce.
“The risk of the risk happening will bring a great risk when it happens”.
… I had previously written that I see 2025 as going to be a year of hard choices, that is having to make difficult decisions in choosing one of the presented options. Black and white, shades of grey, and “the lesser of two evils” are all around us. However, the hard choice/s that I am speaking of is different from choosing mango instead of banana for breakfast.
In 2025, this is what I see happening. Two paths lie before me: one easier and one requiring more effort. The easy one is smooth and where I usually travel. The other is more outside my comfort zone but with both leading to the same place. I will pick the path that I usually avoided, replacing the potential for “immediate benefit” with long-term gains.
That brings me to my personal strategy for 2025. This should be a year of increased self-sufficiency for all of us.
That is not about raising your own chickens. It is about making your own milk tea. Ordering a milk tea delivered by motorcycle is one choice. Going to your kitchen and making it yourself is another option, a better choice for 2025.
Anticipating and preparing for greater risk also comes back to my basic “survival” strategy: figure out the worst-case scenario and then make plans to survive and thrive in that situation. Even in an urban area, depending on your housing condition, you can have a separate water tank to store a three- or four-day supply. A basic generator is a bargain at less than P5,000 during a prolonged brownout.
… You can make a bucket list of everything that is wrong in the world and the Philippines like one local pundit. Or find opportunities in a risky world and increase your wealth. Your choice.
On June 2, 2025, the cycle trend goes into a yearlong uptrend forecasting increased volatility and “risk”. I guarantee that the next 18 months are going to see increased risk. What you do with that risk is your choice. Happy New Year, my friend.
JOHN MANGUN: “Navigating 2025 risks”
I would suggest forgetting about China invading the Philippines—any more than it already has—or any place else for that matter. For one thing, there is a new sheriff in town after January 20th who is not hesitant to go after the money, China’s money. Further, as a result, the saber rattling on both sides of the Taiwan Strait is unnecessary now that the US election is over. Finally, China has an economy in “Desperate Straits” and has a stimulus spending budget of $1.4 trillion that does not need to be upended by war, armed or economic, with “The Trump.”
Expecting a replay of the first Trump presidency of strong US growth and low pre-Covid inflation is more hope than reality. Biden’s borrowing made certain of that. Therefore, rushing into US stocks as in 2016 may require more prudence. As in the Philippines, even with a pro-risk environment, taking a selective stance will be necessary to make money.
Other than Philippine politics, here are the local risks and opportunities I see ahead.
What might happen with local interest rates? The concern is that the peso will devalue if rates are lowered. I think that over the next six months, the US dollar is going to be the one that devalues. Rather than going into the political firestorm of a massive increase of tariffs, Trump can move quietly for US dollar devaluation to achieve the same end of making foreign imports more expensive. That would be favorable for the peso and the PSE stock market.
Ask the experts (I have) and you will be told the condominium market needs 36 or 48 or 60 months to clear the backlog. Pick a number and wait for prices to go lower. Lower prices did not happen in 1997. This time will be different. Can the REIT holders stay happy? Time will tell.
While the headline reads “Philippine annual inflation surged to 2.9 percent in December,” it is still all about the crude oil price that is still in a multi-year downtrend. Will Brent crude, currently $76+, go below $70? Probably not. Will Brent crude go above $82? Probably not. I do not see inflation as a big drag on the PSE. “Gong hei fat choy” I hope.
https://businessmirror.com.ph/2025/01/09/navigating-2025-risks/