RP TO REDUCE DEPENDENCE ON OFW REMITTANCES - GMA
SINGAPORE, JUNE 25, 2007 (STAR) (AFP) The Philippines is hoping to reduce its dependence on remittances from overseas workers by boosting local employment opportunities, President Arroyo said yesterday.
About eight million Filipinos, close to 10 percent of the Southeast Asian nation’s population, now live and work in more than 100 countries.
But Mrs. Arroyo expressed hope that Filipinos would no longer have to seek work overseas in large numbers if conditions improve at home.
“We’re very proud of our overseas Filipinos,” the President said at the two-day World Economic Forum on East Asia ahead of a state visit to Singapore, which hosts tens of thousands of Filipino workers and professionals.
Mrs. Arroyo said she had inherited “a history of economic lethargy” before a burst of growth under her watch.
She said 26 straight quarters of economic growth, tax reform and billions of dollars in foreign workers’ remittances, which fuel consumption, meant the Philippines now has some money to invest in education and other basic services.
“Now that we have our revenues because of our painful economic reforms, we would like to transform the pain into gains in human and physical infrastructure,” she said.
“And when I talk about human infrastructure, I do mean education, healthcare and training,” she said.
Most Filipinos in Singapore work as maids, but a growing number are employed by hotels, retailers and other service-sector establishments in the labour-starved city state. A few are executives in multinational corporations and global banks.
In 2006, overseas workers sent back to the Philippines a record 12.8 billion dollars, up 19.4 percent from 2005, according to Philippine central bank figures which exclude money remitted through informal channels.
GMA vows more reforms to sustain growth momentum By Zinnia B. Dela Peña Monday, June 25, 2007
With the stock market riding high on increased investors’ confidence and the tide of positive economic developments in the country, President Arroyo has vowed to continue implementing key reforms to put the Philippines on a path to permanent, sustainable economic growth and stability.
In an exclusive roundtable forum with The Star’s business section in Malacañang, President Arroyo said she is confident that the country’s economy will continue to grow and could even meet aggressive targets for the year as her administration continues to work towards maintaining a business friendly environment.
Full-year gross domestic product (GDP) growth from 2001 to 2006 averaged a respectable 5.2 percent. The government plans to increase the country’s GDP by 7.1 percent this year or three years ahead of the program and further to nine percent in 2009.
In the first quarter this year, the country registered a 6.9 percent GDP growth, the fastest pace since 1990, due to robust remittances from overseas Filipino workers (OFWs), a stronger peso, a resurgent property sector, a booming stock market, and low interest rates.
The local stock market has been hitting record highs while the peso has been gainingn more grounds against the dollar. The peso is now trading at 46 to $1 range.
“We are confident that we can sustain this momentum as we continue our economic reform program. Our economy has been growing in parallel with our fiscal gains,” said President Arroyo as she noted that sustaining economic growth over the long term would depend to a large extent on the resilience of the financial system which forms the backbone of the economy.
President Arroyo said the reforms that the government will push are intended to create a sound market infrastructure, enhance transparency and market discipline, promote greater investor protection and strengthen the legal and regulatory framework.
Among these measures she said are the Personal Equity Retirement Account (PERA), which provides for a dependable and sustainable retirement plan for Filipino workers, the Credit Information System Act, the Pre-Need Code, the Revised Investment Company Act (RICA), and the Corporate Recovery Act.
The PERA bill will encourage long-term savings and reduce heavy reliance on publicly funded pension funds Social Security System (SSS) and Government Service Insurance System (GSIS).
This bill essentially allows each Filipino to set aside up to P50,000 a year into his PERA, with an income tax credit of five percent of the total contribution and more importantly, all income earned by a PERA is tax exempt. Contributions made to the PERA may be made upon reaching the age of 55 years provided the contributor has made contributions to the PERA for at least 5 years.
With long- term funds made available from PERA investments, we can expect more stable investments in the equities markets and long term financing for housing loans, infrastructure development, and other major capital projects.
With the availability of long-term funds, the capital market is also expected to come up with a variety of products to prepare for the long-term investment horizon.
The Credit Bureau Information System Act, on the other hand, seeks to establish a central credit information system for improved discipline in the credit process. Credit bureaus will be able to serve as a reliable source of information to allow lenders to accurately evaluate risks and select between creditworthy and poor quality borrowers.
Meanwhile, the Revised Investment Company Act seeks to establish a comprehensive regulatory framework to allow investment companies to play a key role in capital formation. It is aimed at protecting the interest of the investing public by preventing the misuse of customer funds.
President Arroyo is also counting on the support of the private sector in creating a vibrant capital market and making the Philippines the favored destination of foreign investors.
“I’d like to say that we have reached the stage of economic maturity. Now we want to transform these macroeconomic fundamentals into real benefits for the people and that is to invest in human and physical inferastructure. A lot of this we want the private sector to do for us or they could join us in our drive to make the Philippines more attractive to foreign investors,” said President Arroyo.
President Arroyo said she wants to use the remaining three years of her six-year term to upgrade infrastructure and bring down legal barriers to foreign investment. This would involve billions of pesos to promote human capital like education, health care, social services and training. In partnership with the private sector, the government will build new bridges, ports and other modern infrastructure to improve the competitiveness of the Philippines. “We expect this not only to attract more foreign investments but to create more jobs and improve the lives of our people as well,” said President Arroyo.
To ensure efficient private sector access to financing, the government intends to lower the cost of doing business by reducing red tape and minimizing corruption.
President Arroyo said the government’s thrust would be to ensure that the masses benefit from the economic gains achieved during the past years.
She also reiterated her vision to turn the Philippines into a First World state in 20 years.
President Arroyo frowned on a proposal prohibiting state pension funds from investing in the stockmarket, saying if the California Public Employees’ Retirement System or CALPERS can do it, why can the Philippines not do the same.
“Calpers is the largest pension fund in the US. If they’re able to do it then why cant we. We need to do the same tack so we can diversify,” said President Arroyo.
Chief News Editor: Sol Jose Vanzi
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