More pabulum from Gloria
Malaya’s editorial today says:
The local markets are in turmoil as the US financial crisis spreads. Investors, lenders and borrowers need information. They are desperately seeking assurance from anybody in government credible enough to be believable.
What they are getting instead is more of the pabulum that Gloria Arroyo dished out to businessmen during the economic briefing she and her Cabinet conducted before she went to the United States purportedly to gather a deeper insight into the crisis and, consequently, come up with measures that would minimize damage to the local economy.
Here’s Gloria’s take direct from Samar: To insulate the Philippines from the effects of the US crisis, the government will focus on easing inflationary pressures, providing safety nets, creating jobs, generating revenues and strengthening the banking system.
This is all, a bunch of motherhood statements? Crisis or no crisis, a government is supposed to focus on these things. Where are the “deeper insights” she gained during her US visit that are supposed to help her craft programs specifically addressing the current crisis? In time, stability would surely return to the US financial system. But between now and that wished-for future, how do we deal with the reality of a global liquidity crunch, a pullout of foreign investments, and a likely deep recession in the US?
Since her return last week from the United States, Gloria has not made an appearance in Manila. She has, however, been all over the countryside with her tired dog-and-pony show of bringing development to the provinces.
* * *
PRESIDENT Arroyo yesterday said her economic team is working hard to insulate the country’s economy from the financial crisis in the United States.
Arroyo said the economic team is focusing on managing the inflationary pressure to avert any continued hike in prices of commodities, and in sustaining economic growth to “continue to generate jobs and deliver the tax revenues we need to fuel our investment,”
She said the government is also strengthening the banking system to improve the fiscal health, encourage investment, sustain the economic growth and insulate the economy from the volatility in the world market.
“We have been working hard to make sure that food supplies remain stable. We’re working hard to make sure that there is food on the table of every Filipino. We have also been introducing measures to lift the burden of high fuel prices from our people,” Arroyo said.
However, details of the programs were not mentioned.
Arroyo convened her economic team Tuesday night in Malacañang to further discuss measures and to assess the impact on the economy of the developments in the US including the rejection of the US House of Representatives on the $700 billion bailout package.
Expected to attend the meeting were Budget Secretary Rolando Andaya Jr., Finance Secretary Margarito Teves, Trade Secretary Peter Favila, Bangko Sentral governor Amando Tetangco, Planning Secretary Ralph Recto, Agriculture Secretary Arthur Yap, and Energy Secretary Angelo Reyes.
Andaya foresees that if the US Congress continues to reject the bailout plan, the current economic crisis could worsen and be far worse than the Asian financial crisis of 1997.
He said this would mean among others, that the interest rates would go up and exports would shrink. The US is the biggest trading partner of the Philippines.
“Mas concern namin kung ano ang effect. What will be the negative effects if a bailout does not materialize? Of course, down the line new taxes would be one of the options,’ he said.
Sen. Mar Roxas called on the Bangko Sentral, the DOF and other government financial institutions not to keep the public “out of the loop” about the unraveling global financial crisis.
“Lack of information only causes uncertainty among the public. As long as the BSP and DOF communicate clearly with the people – from sophisticated investors to ordinary depositors – we are containing speculation,” he said.
Roxas, chair of the committee on trade and commerce, said more importantly, the economic managers must take stock of any impact of the financial crisis on the real economy, which may happen within a few months unless plans to plug these are put in place.
Roxas said that instead of panicking or taking imprudent actions, the government and private sector institutions should take this challenge as an opportunity to plan strategically for the future.
“We already know that global markets are changing in an increasingly dynamic and interconnected way. We all know that we cannot be in ‘business-as-usual’ mode forever,” he said. – Jocelyn Montemayor