U.S. CHAMBER OF COMMERCE ACKNOWLEDGES RP GAINS
MANILA, NOVEMBER 19, 2006 (STAR) By Pia Lee-Brago - The Philippine economy remains relatively healthy and the peso one of the best performing currencies in Asia because of the government’s commitment to fiscal reform, the United States Chamber of Commerce said in a report.
The Philippine Embassy in Washington said the US Chamber of Commerce acknowledged the recent advances achieved by the Philippine government because of its economic and fiscal reform programs.
Philippine Ambassador to Washington Willy Gaa welcomed the report of the US Chamber of Commerce, which he described as "an organization which has a long history of working with Philippine business and the Filipino people."
In its 2006-2007 report "Southeast Asia: Dynamic Opportunities for US Competitiveness," the Washington-based business group stated that "the Philippine economy has demonstrated considerable resilience, and investors remain optimistic about the country."
"The report reflects the positive achievements of the Arroyo administration in its ongoing efforts to strengthen the Philippine economy through resolute fiscal and economic reforms and policies," Gaa said.
In its report, the US Chamber of Commerce noted that "the economy grew by 5.1 percent in 2005, exceeding market expectations. The government has demonstrated a commitment to reducing the budget deficit over the last three years. In 2005, an expanded value-added tax (VAT) was imposed, which strengthened government revenues."
"While the report notes the challenges facing our country, it also acknowledges that there is encouraging news for business," Gaa said.
The report was prepared in cooperation with the American chambers in Southeast Asia. The first-ever American Chamber of Commerce outside the US was established in Manila in 1920.
Peso seen trading between 48.50 to 49.25 to a dollar By Ma. Elisa P. Osorio The Philippine Star 11/19/2006
The peso is expected to trade between 48.50 to 49.25 against the dollar if the Philippines can maintain confidence parity with neighboring countries, a school-based economist said.
Leonardo Lanzona, an economist from the Ateneo Graduate School of Business, said, however, that it is not clear if a stronger peso is good or bad news.
"It’s good news for importers but bad for the exporters and OFWs (overseas Filipino workers)," Lanzona said during a forum held at the Ateneo last Friday.
He said despite the peso hitting the 49- to-a-dollar mark and coupled with a notable export rebound, the country’s imports remained sluggish.
For the second quarter, non factor imports contracted by 2.2 percent from a 10.3-percent growth in the first quarter. Merchandise imports for the second quarter meanwhile, grew 4.3 percent, an improvement from the first quarter’s measly 0.1 percent growth.
Lanzona said this contradiction begs the question, "does this (strong peso, weak imports) signal impending (economic) slowdown?"
The economist said this phenomenon is consistent with falling investments, noting that total real investment has dropped continuously over the past six quarters. The slowdown, he said, started during the first quarter of last year.
For the second quarter, private investment growth went down by 10.5 percent, worse than the first quarter’s three percent. Public investment likewise slowed during the second quarter at 2.1 percent when compared to first quarter’s 14 percent.
For Lanzona, weak investments will have a negative effect on the positive gains in the economy like the 5.5 percent growth for the second quarter.
Chief News Editor: Sol Jose Vanzi
© Copyright, 2006
by PHILIPPINE HEADLINE NEWS ONLINE
All rights reserved
PHILIPPINE HEADLINE NEWS ONLINE [PHNO] WEBSITE