TWO of the country’s biggest business groups last week forecasted "stagflation" in 2001. Stagflation is a financial jargon that means an economic situation where high inflation (an increase of prices of domestic goods and services) and high unemployment occurs simultaneously.

Due to the political imbroglio President Estrada is mired in, economic pundits see an uncertain future beset with an expected slowdown of economic activities.

So what does this mean for the information technology industry?

Bad news but with a bit of good news.

Felipe Manalang, president Fujitsu Philippines, believes that if the present situation (political and economic mess) drags on next year, we’ll be expecting a "bearish" year in 2001.

Economic pundits define a bearish year as a situation where a sector or an overall market is about to fall. Indeed, bad news for the IT industry.

"I’m hoping that Fujitsu Philippines will not be affected that much by the crises because we’re exporting our services and products," remarked Manalang. He maintains that he is "cautiously optimistic" about the year 2001 because while he expects a "bad year" for the company, revenue, profit and headcount targets will be met and even exceeded next year.

His "cautiously optimistic" attitude stems from the belief that local companies, particularly the big ones, will have no choice but to invest on information technology or else risk being left behind in the information superhighway race.

Also, there is the global market that is up for grabs. That is good news.

If there is money to be made in IT next year, it will be in the global marketplace where demand for IT-related services has just increased in the last two years.

"I really don’t see any big changes happening in the IT industry in general because there is a global demand for IT-related services, which is up for grabs. We’re hoping to capture that demand as the country focuses on becoming the e-services hub in Asia," Toby Monsod, executive director of the Information Technology and E-Commerce Council (ITECC), told the INQUIRER. "We have been eyeing the global market when ITECC was created in the first place."

ITECC is currently the highest IT policy-making body, which has members representing various sectors in government and the private organizations.

Monsod disclosed that ITECC next year will be "selling" the e-services hub of Asia idea in different parts of the world, including the United Kingdom, Germany, Scandinavia, Korea, Australia and India, to name a few.

Last week, the Board of Investments (BOI) said it is expecting to get a total of P1.54 billion worth of investments from 11 information technology-related service firms providing services not only to the Philippines but to the global market as well. Most of these firms are Filipino-owned.

"Government at least will do its part to help the IT sector which is primarily private-sector led," she added. Monsod admitted, though, that government was slow to realize that the IT industry opens up opportunities for local firms dying to dabble on IT-related export services—which she believes local firms are good at.

By next year, ITECC also promises not to be distracted by the ongoing "domestic problems" because the "export market is there for the taking," Monsod said. "I think we can’t forever hide under the excuse that the industry is at a standstill because of the current political and economic situation. The global market is not in recession."

Still, she has the utmost respect for some members of the ITECC who have opted to join the "parliament of the streets" in reaction to calls for President Estrada’s ouster.

The domestic market for IT, however, is not as bad as others have perceived it to be. The other good news is that there is money to be made locally.

"For the past years, local companies have invested time and money on buying technology. Next year, most will focus on using technology to run their business," Manalang said. In short, next year will be payback time.

Local firms, he said, will be looking at other local firms which can provide services and products in storage management, enterprise application integration and server consolidation. These markets are nothing "new," Manalang admitted, because local firms are a bit behind in embracing technology.

"Adoption of new technologies in the country usually takes two to three years," remarked Manalang. "The bulk of the business in IT next year will be in the less glamorous implementation of technology vendors had been selling."

Monsod, on the other end, said that the domestic market would benefit greatly from outsourced jobs. The challenge, however, is to lure foreign companies to outsource jobs to the Philippines. At this time, the country has to compete with India and China in this particular market.

"I think the quality of our IT professionals is better than those in other countries in terms of value-for-money," Monsod added. While Filipino IT professionals are not exactly the cheapest labor force right now, she said that they learn quickly, have better attitude toward work, and are easy to get along with—qualities that have remained unmatched.

Manalang, however, admitted that if the political and economic situation is not resolved by next year, the country will likely lose the Filipino IT professionals expected to run the show, so to speak.

Unlike the ideal separation of the Church from the State scenario, the IT sector cannot be extracted from the ongoing political and economic tight spot because IT will someday drive the country to economic prosperity.

It is, in fact, unthinkable that such an event as the ongoing impeachment trial would not claim the attention of every Filipino.

Unfortunately, some major government IT projects will be delayed, as Rep. Leandro Verceles of Catanduanes had earlier declared, since government is now "distracted" by the impeachment trial.

Still, in a not-so-ideal situation, the IT sector has remained resilient because investments in information technology will flow as companies attempt to cope with harder times. Waiting would mean demise.

"I hope local IT firms will take a longer view of things, and continue investing on IT resources—which is the people," said Manalang.

Monsod, on her part, wishes that all efforts in government and the private sector in IT would eventually fall into place next year.

"I know others have maintained a wait-and-see attitude. However, companies cannot risk to fall behind. Meanwhile, I’m betting that with the way the impeachment trial is being handled, things will normalize next year. Foreign investors are, in fact, more concerned with the way we’re handling the crisis than the trial itself," Monsod said.

"I really hope that whatever the outcome of the trial, Filipinos will accept the verdict. After that, we can move on."