LOCAL BUSINESS AIRS RISING FEARS ON ECONOMY; PESO AT NEW RECORD LOW
MANILA, November 29, 2003 (STAR) By Marianne V. Go - The local business community, led by Philippine Chamber of Commerce and Industry (PCCI), expressed its concern yesterday on the country’s seeming lack of good governance, worsening peace and order situation and the continuing lack of infrastructure to support the growth and development of the business sector.
In a resolution submitted to President Arroyo during the 29th Philippine Business Conference (PBC), the local business community also cited the need for the passage of key legislation regarding business development as well the provision of more credit and financing for the business sector, protecting the environment and nurturing the country’s human capital resources.
The group also highlighted their growing concerns about the country’s trade policies, industry and other cross-cutting issues such as population and food security.
PCCI president Sergio Ortiz-Luis said most of the concerns of the business sector are long-term and recurring such as the peace and order situation and lack of infrastructure and the government is exerting effort to address these problems.
Officials of the PCCI led by Vicente Lim, Raul Boncan and Raul Hernandez agreed with Ortiz-Luis that Malacañang has been exerting effort to address the business sector’s concern.
In fact, Malaca-ñang presented yesterday a 25-page response to the PCCI’s resolution.
The PCCI officials said that President Arroyo were able to address majority of their concerns at her keynote speech during the PBC opening.
President Arroyo lauded the PCCI for working with her to boost the local economy. The country’s gross domestic product (GDP) grew by 5.9 percent during the third quarter of the year.
Mrs. Arroyo also cited the government’s concrete response to the peace and order problem, specially kidnapping.
The businessmen applauded the President’s decision to allocate a P300 million reward fund for the capture of known kidnappers as well as her instruction for more police presence.
But while the PCCI officials gave the President a high rating of eight for her speech, they withheld rating her for her overall performance in the past two years or giving her an outright endorsement until they have listened to all of the presidentiables.
Hernandez said the PCCI would revue Malacanang’s 25-page response to their resolution and come up with a scorecard on how government has responded.
Peso falls to new record closing low of 55.73 to $1 By Des Ferriols Star 11/29/2003
The peso plummeted yesterday to a new record closing low of 55.730 to the dollar as investors continue to unload their peso holdings due to rising political uncertainties.
The peso traded in an unusually tight band throughout yesterday’s session at the Philippine Dealing System (PDS), opening weak at 55.720 and deteriorating further to an intra-day low of 55.740 to $1.
Yesterday’s close was four centavos lower than Thursday’s close of 55.690 to the dollar. Total volume traded amounted to $107 million on an average rate of 55.719 to $1.
Traders said they expect the peso to remain weak in the next few days, saying that political concerns will continue to hound the local currency even next week.
According to one trader, there was resistance in both sides of the range as the peso refused to break out beyond 55.740 even after hitting an all-time intra-day low of 55.850 to the dollar last Thursday.
The market has been besieged by what analysts perceived as negative developments, especially after actor Fernando Poe Jr. declared his intention to run for president.
Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura urged politicians to help remove the uncertainty in the market by unveiling their respective economic platforms.
The BSP chief said much of the jitters in the market was caused by the apparent lack of concern among political candidates about the country’s economy and how they intended to steer the country towards sustainable growth.
"The market needs some basis with which to make judgments," Buenaventura said.
"Once the different candidates unveil their economic programs and name the team that would implement these plans’ much of the uncertainty would be eased."
The preoccupation with personality that has characterized Philippine politics has been singled out as the biggest cause of uncertainty by Standard & Poors Credit Ratings Services.
Foreign banks have also remarked that even foreign investors are questioning the absence of political and economic platforms in Philippine politics since these would help both voters and investors to differentiate the parties from each other.
"Its not so much about specific candidates but a generalized uncertainty that any election brings about," said Hong Kong and Shanghai Banking Corp. (HSBC) treasurer John McGowan.
McGowan said that if there was anything that was causing perplexity among foreign investors, it was the absence of a clear platform among competing parties in Philippine politics.
"If you look at it from offshore, its unusual because they’re used to political parties with different and often conflicting platforms, " he said.
Even without the recent political distractions, McGowan said the peso would have still been trading at 54 to the dollar. The upside in the remaining months, he said, was inflow from overseas workers and equity investments that have been trickling in.
Reported by: Sol Jose Vanzi
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