I normally don’t pay much heed to corporate rumor-talk, however several bits of not-so-encouraging information have come my way, which with a very big CAVEAT, I am sharing here in case anyone can confirm their veracity:
First is that the local Philippine entities of banking giants Citibank and Standard Chartered will be or are in the process of rationalizing their branch networks. Citibank is said to be closing down at least six of its Savings Bank branches within the next three months, at the same time, a slightly conflicting report said the Citibank will instead be opening branches in the high-end areas of Rockwell Center and Fort Bonifactio. Rival foreign bank Standard Chartered is said to also be closing its Philippine branches in Quezon City and Caloocan City.
On another note, property giant Ayala Land is said to be offering a generous settlement of as much as thirty-six (36) months pay to those who will avail of early-retirement as a measure to rationalize staffing costs. As much as 20% of the company’s existing staff are said to have signed up for the offer.
The above bits are not confirmed, however what makes me a little worried about these developments, whether real or imagined, is its implications on the Philippine economy. The status of large banks such as Citibank and property developers like Ayala are an indicator of economic health. Only recently, the Philippine government downsized its GDP growth forecast in light of the recession already affecting the US, Europe, and just this morning: Japan. Throughout the financial crisis, the Philippines has seemingly escaped unscathed, but developments in the US have not spared the Philippine Stock Market, and even the financial woes of AIG has forced the sale of its otherwise healthy local Philippine affiliate: Philam Life.
These rumors are an indication that there may be no escaping the global recession that began with the blow-up of US mortgages. Peter Schiff commented on Bloomberg earlier about how Asia will definitely be affected by the US slowdown, but unlike the US and Europe, Asia’s manufacturing and production capacity remains intact–and is strong enough to weather the storm. Whether this assessment is correct, remains to be seen.
Meanwhile, I just hope there’s more fiction than fact behind the grapevine.