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HOLD on
to your jobs, hatch a compromise in
collective-bargaining agreement talks and brace for the
impact of a financial crisis spawned in the Philippines’
largest trading partner, the United States.
These
constituted the advice of economists Fernando Aldaba of
the Ateneo de Manila University and Alvin Ang of the
University of Santo Tomas on Wednesday, as the
government’s economic managers, along with President
Arroyo, conducted a midyear economic briefing. The
President said the country could ride out the impact of
the US crisis because of certain steps and reforms her
administration had taken.
“Those
who still have jobs should be thankful at the moment;
with the financial meltdown, we can expect companies’
profits to be moderated. Don’t give employers a reason
to cut jobs,” said Aldaba, a former labor organizer, now
chairman of the Ateneo economics department.
Ang, who
is also a member of the Philippine Economic Society that
Aldaba heads, concurs.
“We’re
not pessimistic. We just want to make the public take
stock of what’s really happening: Because of the global
environment, the impact wouldn’t be minimal.”
The
BusinessMirror asked for Aldaba’s and Ang’s reactions as
government executives tackled the country’s half-year
economic performance on Wednesday.
President Arroyo admitted during the briefing that the
US housing credit mess exacerbated by high oil and
commodities prices “has hit the Philippines hard.”
“Our
economy has not been spared,” President Arroyo said at a
jam-packed Rizal Ballroom of the Makati Shangri-La Hotel
in Makati City.
But, she
said, her government’s actions eased the impact of the
crisis, such as removal of tariff on petroleum products,
food-for-school program, power subsidy, microfinance,
scholarships and college loans, fuel discounts,
income-tax exemption and supplemental calamity budget.
“While
the recent economic picture has been challenging, there
is also no doubt that, thankfully, we have had the
foresight to plan for this day through tough choices,”
she said.
However,
lawyer Nepomuceno Malaluan of the advocacy group Action
for Economic Reforms said that while these subsidies
provide some relief, especially for farmers, high
inflation cannot address the crisis of income and
employment, which are intensified by the meltdown.
“There
are structural problems that require a fundamental shift
in economic policies. There has been no major review,
which the executive level should do now, meltdown or no
meltdown,” Malaluan said.
“Generally, if they [economic advisers] look at things
as business as usual without fundamental review of
economic policy, that doesn’t address key issues,
especially income,” Malaluan added.
These
economists agree that the country’s over-reliance on
overseas Filipino workers (OFWs) to prop up the economy
is not sustainable.
Bangko
Sentral ng Pilipinas Governor Amando Tetangco Jr.
admitted during the briefing that the economy’s
resiliency is partly due to the continuing increase in
OFW money flowing into the country.
“We were
able to hurdle the second round of price pressures
because our balance of payments remained strong,
estimated to reach $2 billion,” Tetangco said, adding
that OFW money is expected to help gross international
reserves to hit $37.1 billion.
Aldaba
said he expects Philippine economic growth to continue,
“but this will be limited to growth sectors fueled by
remittances, like real estate, telecommunications,
tourism and retail trade consumption that are really
from OFWs.”
Ang
hopes the remittances would further increase “because
that it the only cushion the economy has in view of a
very, very volatile market.”
However,
Ang said now is the time for the government to come up
with ways of converting these monies into long-term
investments, not just in consumption.
“Definitely, government spending is coming too late; our
only hope are the remittances,” Aldaba said.
The
government needs to undertake lots and lots of reforms
so that economic agents can respond, he added. “The
future is not so bright.” |
