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By Francis Earl A. Cueto, Reporter
The US government is trying to reassure the
Philippines that it will not be greatly affected by the recession
threatening America, the world’s largest economy, an embassy
official said Sunday.
The US and the Philippines have a lot economic
partnerships, and so it is in America’s interest to help the local
economy, said Rebecca Thompson, spokesman of the US Embassy in
Manila.
“I am not an economist, but I could say that
the US is working on many areas in economic cooperation with the
Philippines that we are confident will benefit both of our
countries,” she said.
Fears of a US recession had spread throughout
Asia, rattling stocks last week. That exacerbated the potentially
negative impact of the US Federal Aviation Administration (FAA)
downgrading of Philippines’ air-safety rating that people say will
cost the country billions of dollars in trade, investments and
tourism business.
“We’re being hit by both external factors
and some concerns on the macroeconomic front,” Jose Vistan of AB
Capital Securities said.
Investors, both local and foreign, are nervous
and apprehensive, not because of political threats, stock analyst
Astro del Castillo said. The Philippine stock market will perform
poorly in the next couple of weeks or even months until talks of a
US recession subside, he added.
Another expert said the Philippine exports as
well as Filipino local and overseas employment would be greatly
dampened by a possible US recession, but this would also be the best
opportunity to lessen dependence on the world’s largest economy.
Signs of a looming US recession became evident
last year as world oil prices soared, the volume in financial
markets thinned out, and the American dollar weakened, said Leonor
Briones, University of the Philippines professor and former national
treasurer of the Philippines.
Briones said the effects on the domestic economy
would be immense since the United States is the Philippines’
largest trading partner.
The US is also the largest source of
remittances. More than 40 percent of some eight million Filipinos
based abroad, or a 10th of the Philippine population, are in the US.
Among others, she said local employment would be
hardest hit, because the booming call center business, which caters
to the US market, faces cost-cutting measures that could include
office closures and layoffs.
There will be less demand for locally based call
centers because companies in the US are expected to slash their
customer-service budgets, experts said. Those expenses are commonly
the first to be cut, as businesses focus on bare necessities.
Overseas, the number of Filipino nurses and
caregivers could be reduced, and those working in the United States
may not obtain security of tenure, experts added.
Looking at the bright side, Briones said a US
recession is the best reason for the Philippines to shift its
focus—and dependence—to other nations like Japan, China and the
European Union members.
What recession?
Another UP professor and former socioeconomic
planning chief, Felipe Medalla, said he does not see a US recession
coming.
“There is a slowdown in the US growth but not
totally a recession,” he said.
Medalla said this slowdown also impacts the
country’s exports, given the fast appreciation of the peso. But he
said the amount of foreign debt that the country is paying would be
lessened.
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