This is an overview of the current research and related studies on the three scenarios NSC faced between 1994 and 2000. These are, namely, the state of Philippine industry and manufacturing including policies particularly privatization, special purpose vehicle law and tariff liberalization; the Asian Financial Crises in 1997-98 and its aftermath; and the global slowdown of the steel industry leading to liquidation or bankruptcy of several manufacturing plants.
Most of the published researches presented only the facts of these three events and their repercussions to the national economy, but neither to steel production, in particular, nor any other manufacturing sector, in general. Examples, Amponsah and Boadu (2002) tackled the crisis in the U.S. textile and apparel industry then asked whether it was caused by Trade Agreements and Asian Currency meltdowns, while Carpio (1998) and Bond and Miller (1999) both addressed the Asian banking and financial sectors. Meanwhile, the case study of Basilio and Cabasan (2004) focused on the impact of the closure of NSC to the local governance and challenges of economic distress in Iligan City, particularly one that altered population pattern and welfare of the city.
Drapeau (2004) itemized four primary causes of business failure and subsequent bankruptcy: economic, financial, corporate fraud, and disaster. Ruling out the last three as insignificant to this particular research as insinuated in the limitations, of particular interest in Drapeau’s study is its consideration of economic factors to include industry weakness and poor location. NSC has been considered a pioneer steel plant in the ASEAN region, thus poor location can be safely tossed out of the equation, leaving industry weakness as an important beacon to consider.
Notes:
Amponsah, William A. and Victor Ofori Boadu (2002), “Crisis in the U.S. Textile and Apparel Industry: Is It Caused by Trade Agreements and Asian Currency Meltdowns?” NC, USA: International Trade Center, Department of Agribusiness, Applied Economics and Agriscience Education, May, 2002. pp. 1-14. back to text
Caprio, Gerard Jr. (1998). “Banking on Crises: Expensive Lessons from Recent Financial Crises, ” Development Research Group, The World Bank, Working Paper F1979, June, 1998, p. 3. back to text
Bond, Timothy J. and Marcus Miller (1999), “Financial Bailouts and Financial Crises.” Masteral Thesis. January 1998, Revised January 1999. back to text
Basilio, Leilanie, and Jeremiah Cabasan (2004), “Local Governance and the Challenges of Economic Distress: The Case of Iligan City,” Discussion Paper. Manila: Philippine Institute for Development Studies, Series 2004-45, December 2004, p. 2-3. back to text
Drapeau, Richard (2004). “Bankruptcy Prediction Model Using Discriminant Analysis on Financial Ratios Derived from Corporate Balance Sheets.” Doctoral Dissertation. Australia: Lamar University. back to text
