MANILA,  January 5, 2004 (STAR) By Marianne V. Go - The Board of Investment (BOI) reported yesterday that approved investments, including those approved by the Philippine Export Zone Authority (PEZA), totaled P54.66 billion from January to October 2003.

In a yearend press briefing, Board of Investments (BOI) Governor Kim Henares said that the P54.66 billion is already a 30- percent increase over last year’s total investment figure of around P40 billion.

Henares, however, did not release further details about the 11-month investment figure.

She divulged though that of the P54.66-billion total investments, about half or 53 percent was invested in the manufacturing sector.

The BOI had earlier reported that total investments had reached PEZA

P48.875 billion in the first 10 month of last year increasing by 21.55 percent compared to the P38.563 billion that were approved from January to October 2002.

Of the total approval of P48.875 billion, P24.576 billion was approved by the BOI, while P22.298 billion was approved by the PEZA.

The BOI approvals of P24.576 billion, showed an increase of 27.42 percent compared to the approvals from January to October last year of only P17.884 billion.

Statistics belie realities BIZLINKS By Rey Gamboa The Philippine Star 01/05/2004

Last week, we took stock of important economic events that happened during the year, a sort of feeling-our-way-through-2003 by looking at what we felt are landmarks that would have contributed to the country’s staying above water, economically speaking.

Today, we take a look at some more hard facts and statistics that tell us how the economy is faring: the country’s productivity, employment, money management, and the government budget. Offhand, it appears that when it comes to cold figures, there is no arguing that the current administration appears to be meeting most of its targets.

Modest Productivity Growth

The country’s productivity, measured through the gross domestic product (GDP), hit 4.4 percent in the third quarter due to the rebound of the farm sector. The momentum, if economic managers are to be believed, would carry on in the last three months of the year with consumption as the main driver.

The central bank is projecting that the fourth quarter GDP growth of 4.2 to 4.4 percent would allow the economy to hit the low end of the 4.2 to 5.2 percent full-year target. The expected GDP growth for 2003, however, is lower compared to a 4.6 percent improvement in GDP in 2002.

The unemployment rate had gone down to the 10 percent level from more than 12 percent. But of course, this data is artificially propped up by the deployment of close to eight million Filipinos abroad who send more than $7 billion in remittance each year.

Slow Increase In Cost Of Goods

Inflation is even better at only about 3.1 percent for the full year which would be at par with the previous year’s average increase in consumer prices. For two years now, the government had managed price increases below the 4.5 to 5.5 percent ceiling.

With the low inflation rate, the BSP was able to reduce the policy rates and keep it steady despite the wild gyrations of the peso. And the National Government was able to fend off banks’ attempts to drive Treasury bill yields higher because the central bank managed to bring down overnight rates to 6.75 percent for borrowing and nine percent for lending, the lowest since 1992.

Reining In Spending

But the single biggest accomplishment of the government this year would be its seeming control over the fiscal sector. As of November, the deficit was only at P172.2 billion against an 11-month target of P189.7 billion. For the whole year the gap between revenue and spending is seen to go below the P202-billion target. While government spending is way over what it is earning, this year’s performance could be counted as a blessing considering its history of exceeding the deficit target by as much as 50 percent.

Since the deficit was under control for most part of the year, the fixed-income market had less reason to push interest rates up. This was partly the reason why despite the volatile political situation in the second half starting from the July 27 military uprising, the government’s cost of borrowing had remained relatively stable.

But A Peso Gone Berserk

But the same could not be said of the peso which was hostage to a string of political developments. Of course, the market again tried to exploit the situation to enable pressure to build up and force the lower valuation of the currency.

After the failed mutiny in July, the Court of Appeals’ decision to suspend BSP Governor Rafael Buenaventura and several other monetary officials for a year followed. Of course there was also the Jose Pidal issue and then the impeachment of Chief Justice Hilario Davide Jr. in October.

A month later, Jose Isidro Camacho announced his resignation effective end-November. Then during the last week of November, Moody’s Investors Service said it would likely downgrade the country’s credit rating. That same day, the man they call the king of Philippine movies, Fernando Poe Jr. (FPJ) announced his candidacy.

Through all these events, the peso was in a state of free-fall as it charted new record lows practically each day for some time. The record to beat now is P55.73 for closing day and P55.85 on intraday. Both lows recorded on Nov. 28 were in reaction to the Moody’s report and FPJ’s announcement the day before.

The peso was on its way to a gradual recovery at the start of December largely due to a strong dollar remittance, but a statement made by Camacho that the country is in a fiscal crisis again pulled sentiments down, and the local currency along with it.

So What’s The Real Score?

If we wager a debate with the economic team, then their claim that the economy is moving well would be hard to dispute. They have statistics to back their claims.

Sadly, however, in this country, these upbeat statistics do not reflect the true reality. Unlike in more developed economies where economic stimuli such as low inflation and low lending rates translate to increased economic activity, ours doesn’t. These depressants – too much politics, uninspiring leadership, too many uncertainties – are simply overwhelming and de-motivating.

The point is that these scholarly numbers do not mean much for most of the 82 million Filipinos. No matter how good the stats are, millions still don’t have jobs, poverty levels are on the rise, and food and health care delivery continue to be pressing needs of the basic Pinoy family.

Statistics may look good as election campaign material. But for millions and millions of Filipinos, they’d rather see pesos in their pocket, food on the table and have the comfort feeling of getting through another day.

Candidates for 2004 elections, please take note. Or, we may realize rather late that beneath the seemingly good economic statistics is a seething social volcano ready to erupt.

The Good And Bad Side Of ‘Texting’ On TV

"Isyung Kalakalan at Iba Pa" on IBC News (4:30 p.m. and 10:30 p.m., Monday to Friday) starts this week with a discussion on the phenomenal success of text messaging among Filipinos. But as with any extraordinary developments, there are abuses that go with it. Short message servicing (SMS) or simply "texting" is viewed by a growing many as a convenience that is relatively inexpensive. But other sectors of society are bringing new, but not necessarily desirable aspects. When it impinges on productivity or becomes a medium of gambling, then regulation may be needed. Watch it.

‘Breaking Barriers’

2003 Highlights "Breaking Barriers" on IBC (11 p.m. every Wednesday) will feature on Wednesday, 7th January 2004, vignettes of the episodes shown during the 2003 season. Those who missed some of the previous airings will have the opportunity to catch up on these discussions. Watch it.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at If you wish to view the previous columns, you may visit my website at

Reported by: Sol Jose Vanzi

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