Trust is the cornerstone of a functioning economy

Back in August 2021, when the COVID-19 Delta variant — the fastest-spreading and deadliest variant yet - rampaged through the population, Metro Manila went into a two-week lockdown to arrest the spread of the virus.

- JOEY CONCEPCION

It was a hard sell for the business community, coming after months of economic inactivity because of the outbreak. But lock down we did, and it was all to save the most important time of the year: Christmas.

This was not for purely sentimental reasons. For millions of small businesses, the fourth quarter is when months of planning, inventory buys, and narrow margins either pay off or don’t. That rhythm is delicate and depends on a basic social contract: that consumers feel confident enough to open their wallets. You can’t do that with a virus running rampant among the population.

In today’s turbulent political climate, the recent corruption scandal engulfing our government is the virus that is attacking the people's trust. It could significantly impact consumer spending in the fourth quarter of this year ~a time when many businesses rely on the holiday season to bolster their annual revenues.

Trust is the cornerstone of any functioning economy. When consumers lose faith in their government, they become hesitant to spend. The ripple effect of this reluctance is particularly detrimental to small businesses, the backbone of our local economies. These enterprises thrive on consumer expenditures; a slowdown in spending during the crucial fourth quarter could lead to widespread financial hardship, layoffs, and even closures.

Zoom out to the larger impact of the corruption scandal, and you'll see wary foreign investors clutching their wallets closer to their chests and having second thoughts about engaging in business with the Philippines. The contract is fraying, and it hurts to see it after the country has done so well in the past few years to regain its position in the international community.