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CONFIRMATION that the US has been in recession since
December last year should offer some relief. The National Bureau of
Economic Research (NBER), which is in charge of determining whether
the US is technically in such a rut, made the announcement early
this week. This means the American economy has been contracting or
registering negative growth for about a year already.
If so, then the Philippine
economy has been faring relatively well despite the weakness of its
biggest export market. The good news is that, contrary to
popular wisdom, we haven’t slipped into the same quagmire as the
world’s largest economy, thanks largely to Filipino consumer and
business spending, as well as, surprisingly, exports.
Philippine gross domestic product
(GDP) grew by 4.6 percent in the first nine months of the year. The
industry sector surprised everyone. It expanded 7.1 percent in the
third quarter from 6.6 percent a year ago. Agriculture and services,
as expected, both slowed.
On the expenditure side,
household spending remains the main driver of economic expansion,
rising 4.6 percent, admittedly slower than last year’s 5.7
percent. Exports, the second biggest contributor to expansion,
actually grew at a faster rate of 4.7 percent this year from last
year’s 3.7 percent. Capital formation, the third largest
contributor, understandably slowed to 4.8 percent from 7.6 percent
year-on-year.
Given the government’s original
growth goal of 6.1 percent to 7.1 percent for the whole year, the US
recession shaved off about two percentage points from local economic
expansion. If the US would remain in the muck into the first half of
next year — which is what a number of experts are saying — then
Philippine growth should pick up come 2010, by which time
election-related spending would kick in.
Between now and 2010, Washington
should ensure the spending tap is wide open. Capitol Hill already
authorized a bailout fund for troubled Wall Street firms, and is
considering a similar plan for the auto industry.
While the world’s second and
third largest economies —Japan and Germany—are also in
recession, their governments are pulling all stops to monetary
easing to ensure they have ample funds for economic activity. The
fourth biggest, China, is slowing down, but Beijing has unveiled its
own massive pump-priming plan.
No sense of urgency
Malacañang has rolled out safety
nets for the poor, largely in response to high inflation. Next
year’s national budget however is pending before a legislature
(the lower house mainly) that has opted to prioritize ephemeral
concerns—and there’s the rub.
There appears to be no sense of
urgency among local politicians who have been wasting time and
public money on a mockery of an impeachment case against President
Arroyo, and on a move to amend the Constitution and extend term
limits. Such poor sense of timing and utter lack of perspective!
While US lawmakers are
deliberating on the fate of millions of Americans whose
jobs—directly and indirectly—depend on Detroit’s Big Three,
Filipino legislators are, to be blunt about it, positioning
themselves for the 2010 elections or moving, through Charter change,
to extend their terms of office.
Times like these remind us to
question the wisdom of preferring a country run like hell by
Filipinos to one run like heaven by our American colonizers. Well,
thanks to the late President Quezon, we’re still run like hell.
But back to the crisis at hand.
Besides working on the passage of next year’s General
Appropriations bill, our legislators should take their cue from
their US counterparts and look into industry-specific measures to
help us cope with, if not actually thrive, despite the global
slowdown.
BPO and tourism
In this regard, two sectors hold
out much promise, namely business process outsourcing (BPO) and
tourism. While we symphatize with the recent political misfortunes
of India and Thailand, we should stand ready to catch the fallout
from the first country’s BPO industry and the second’s tourism
business.
The BPO and tourism sectors are
among the nascent drivers of recent Philippine economic expansion,
with the first well-positioned to help tide the country through the
current global turmoil and beyond. But both industries’ potential
is hampered by domestic policy and infrastructure gaps.
These issues have been discussed
no end in numerous forums, and so need not detain us here. What is
important however is that our lawmakers revisit the wishlists of
these two industries.
Along with the 2009 national
budget, policy reforms these two sectors require can form the
ramparts of our national defense against the current global crisis.
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