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By Angelo Samonte, Reporter
The Arroyo government will “pump prime” the economy and will
look for alternative markets to the US to counter the financial
crisis there that is reverberating worldwide, a Palace official said
Sunday.
“The strategy now is to pump prime the
economy,” Press Secretary Jesus Dureza said in a radio interview.
“The government must support as many projects as it could
especially in infrastructure development to create more jobs. The
President and her economic team are monitoring this on regular basis
to know what to expect, so that they can immediately respond to
events that affect us directly.”
Last week, Budget Secretary Rolando Andaya told
reporters that the proposed P1.43-trillion budget for 2009 includes
a 20-percent increase for infrastructure development from this
year’s appropriations and a 56-percent increase in agriculture
spending.
But also last week, fears about the US
economy—and from rising prices—forced the government to lower
its economic growth targets for this year and for 2009.
Already, there is concern about the budget
deficit, which reached P31.7 billion as of August. The
government’s 2008 deficit target ranges from P45 billion to P75
billion.
Alternative markets
Dureza said the Philippines should look for
other export markets, because the US can no longer sustain a vibrant
trade with the country owing to the crisis. He said the Philippines
is looking at China, India and other countries.
“The biggest market is China and that is a
good market to develop.
India is also another economy that is growing at
this time,” the secretary said.
OFW remittances
“However, we expect a slowdown in the
remittances of our OFWs [overseas Filipino workers] from our
traditional market. If there is recession, the remittances will
fall,” he added.
Some 10 million Filipinos are working overseas,
and they remitted about $14 billion to their families in the
Philippines last year.
The Arroyo administration is optimistic that the
economy could stabilize quickly, if the remittances from Filipino
workers in the Middle East remain high.
Dureza said, “Employment in the Middle East
continues and it is not affected by the US crisis. Somehow this will
continue and this will be one of our backbones even there’s a
global crisis. They [OFWs] are the people to depend to. They are our
heroes.”
The President is focused in her
administration’s economic reform agenda, he added. “It will help
us weather what I call [a] storm, but having said that, we have said
the President has called on us to stay the course. Let us not
slacken reform efforts [because] this recovery will take a long time
in [the] long term and the road to recovery will start but will take
time.”
US President George W. Bush said also on Sunday
that economic recovery could take some time. (See related front-page
story.) Other reports quoted experts who predicted that the US faces
a recession, even with the $700-billion bailout measure approved by
the US Congress.
The bailout measure was the described as the
largest economic intervention by the US government since the Great
Depression in the 1930s.
Brace for worse
Despite Malacañang’s plans, Dureza said the
public must prepare and brace for possible fluctuations in the
prices of basic commodities as a result of the US economic turmoil.
“It will be hard times for everybody, not only
for the ordinary consumer, but also all other sectors. There might
be inflationary effect in the price of commodities and these may
rise again,” he said.
The previous inflationary effect has already
leveled off, because the prices of fuel and rice have gone down, he
said, warning that since there are volatility factors the prices
could move up again anytime.
Inflation reached a near 17-year high of 12.5
percent in August, and government officials predict the rate to peak
either in September of October before easing toward yearend and next
year.
“So we have to be ready for more problems,”
Dureza said. “We just hope that this leveling off will remain
steady.”
Minimal impact
During the weekly Balitaan sa Tinapayan news
forum in Manila, Undersecretary Danny Consumido of the Office of the
President’s external affairs unit, said the US financial crisis
would not severely affect the Philippines because of its strong
economic fundamentals.
“We can survive . . . because we have other
trading partners, such as China and other foreign countries, unlike
before when the country only has [the] US as a trade partner,” he
said.
He added the public should not to panic, even as
banks in the US collapse and financial institutions in nearby Hong
Kong face threat of bank runs. “All we need to do is to monitor
the stock market.”
In the same forum, Astro del Castillo, director
of the Association of Securities Analysts of the Philippines, said
remittances from Filipino workers abroad is insulating the country
from the US crisis fallout.
He added the financial meltdown has the minimal
effect on Philippine banks, and there may be an opportunity for
Filipinos in this crisis. “We should practice patriotism by buying
Filipino products so that more money would circulate in the
market.”
-- With Ruben D. Manahan 4th
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