Standing on fragile sand

aug 1

The Department of Trade and Industry provincial office Wednesday gave a not so rosy picture of Tagum City’s economy as its chief specialist Vedastito Galvez bared of a low 30-percent yearly renewal rate of businesses after the five-year period of effectivity of business name registrations. That even while there was 74-percent increase of the business name registrations from 2006 to 2007.

Since while the city seems to have already an economy and a business configuration that can already feed its own growth and urbanization since it became a gold boomtown towards the mid 80s, DTI’s statistics on lowest 30-percent renewal rate of business registrations would either imply that these microenterprises, with capitalization of less than P3 million, on where the city’s formal economy has been dependent of, there is unsustainability of micro livelihood and businesses, or this backbone of the city’s economy has just always been beaten black and blue by the uncontrollable macroeconomic blues causing the collapse and bankruptcy of microenterprises. Or a combination of both of these.

The DTI’s renewal rate needs to be treated seriously as each business registration is virtually a business in place and operational, while the DTI provincial office said that it cancels out businesses registered that it catches to be non-operational within six months after the release of business names. Indeed, DTI statistics don’t lie.

If this is so, then Tagum’s economy might be already standing on loose, fragile sand of its economic fundamentals, and its continued sustainability might have only been propped up by continuous streams of microenterprises which put up their chips, while the bad effects of losing microenterprises are only offset by the informal sector of the vast slippered folks and lowly vendors in the underground economy. Unfortunately, those in underground economy have been shut out from the official DTI statistics, and we could not further postulate and assess.

Even then, it has always been the informal sector of the underground economy that has been the savior whenever the country’s economy suffers a crunch like the one that is pinching us ad infinitum nowadays. (Cha Monforte/Rural Urban News) http://ruralurbanews.blogspot.com

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