GIBO: GROWTH MUST TRICKLE DOWN TO THE MASSES
[PHOTO AT LEFT - Presidential Candidate Gilbert 'GIBO' Teodoro Jr.]
MANILA, MARCH 3, 2010 (STAR) By Iris G. Gonzales - Lakas-Kampi-CMD standard bearer Gilbert Teodoro Jr. vowed to make economic growth trickle down to the grassroots level if he gets elected as the next president of the Philippines.
The Harvard-educated Teodoro said this can only be done if there is sustainable economic growth of at least eight percent for a period of at least 10 years.
“We have to have long-term growth so that it can trickle down,” Teodoro said in a rountable discussion with editors of The STAR.
Such sustainable economic growth, he said, can only be possible if the government puts in place the proper environment to attract foreign and local investments.
For foreign investments, he said, he would use his first 100 days to invite two big-ticket global firms to set up operations in the country and use this as pitch to invite other potential investors.
”Success will build on success,” he said.
He believes in liberalizing some lands except agricultural lands. He also believes in opening up other sectors such as tourism and mining to attract investments. At the local level, Teodoro promised to provide fiscal incentives to local government units that are “investor-friendly.”
Additional funds to help in extending these incentives may come from the President’s discretionary funds, he noted.
He is counting on investors to bring in the funds that would fuel economic growth but was also practical enough to recognize that there is a need to impose new taxes.
“No choice,” when asked if he plans to impose new taxes.
However, he said he wouldn’t anymore touch the current income tax rate, noting that this is already among the highest in the region.
“Our income tax rates are one of the highest. You can’t anymore play with that. It’s very high already,” he said.
Instead, Teodoro said, he would push for an increase in consumption and excise taxes.
He also plans to maximize growth areas outside Metro Manila by ensuring that there are enough roads and bridges that would link the regions to the capital.
“We will ease communication between and among regions.
You’ll have to have more airports and seaports. That’s the only time you can serve more,” he said.
Teodoro said his government would push for improvements in the corporate regulatory environment by raising the salaries of regulators.
In the area of power, Teodoro said his government will tap alternative sources of energy but those that are not too costly for the country.
He noted that geothermal energy is quite expensive and added that there may be a link between earthquakes and the use of this kind of power.
As he laid out these grand plans, the former defense secretary said that ultimately, the key to ensuring economic growth is to have peace and order and a stable government.
Private think-tanks see 1st quarter growth below 3% due to drought By Lawrence Agcaoili (The Philippine Star) Updated March 02, 2010 12:00 AM
MANILA, Philippines - Metrobank Group’s First Metro Investments Corp. (FMIC) and the University of Asia and the Pacific (UA&P) see the growth of the country’s domestic output as measured by the gross domestic product (GDP) limited to below three percent in the first quarter of the year due to the impact of the El Niño weather conditions.
In a study entitled “Bad Weather Slams Recovery,” FMIC and UA&P said the prolonged drought would result in a two percent to three percent decline in agricultural output from January to March this year.
The groups said the continued appreciation of the peso against the dollar would also dampen the continued growth in the amount of overseas Filipino workers’ remittances.
“GDP growth for the first quarter is likely to be below three percent, considering a two to three percent decline in agricultural output due to the El Niño phenomenon, and strong peso that will limit the stimulative effect of OFW remittances,” the study stated.
However, FMIC and UA&P expect the country’s GDP picking up in the second quarter due to heightened election spending in time for the May 10 political exercise.
Economic managers through the Cabinet-level Development Budget Coordination Committee (DBCC) see the country’s GDP growth accelerating to a range of 2.6 percent to 3.6 percent this year from 0.9 percent last year due to the global economic recovery.
However, FMIC and UA&P said the impact of the damages caused by tropical storm Ondoy as well as typhoon Pepeng and the El Niño weather conditions would bring down agricultural output this year.
“In 2010 H1, it is El Niño, with its dry spell almost all over the country and is likely to bring down agricultural output by one to two percent. And even with some recovery in industry and services, it is unlikely that we will see above four percent GDP growth in first quarter,” the study said.
According to the study, inflation would range between four percent and 4.6 percent this year from 3.2 percent last year. This would be within the inflation target of 3.5 percent to 5.5 percent set by the Bangko Sentral ng Pilipinas (BSP) for the year.
“Inflation will remain range-bound between four percent and 4.6 percent in the coming months despite the recovery in crude oil and metallic mineral prices, because of weak domestic aggregate demand,” it added.
Likewise, OFW remittances would continue to grow while increased corporate savings, total liquidity of the financial system would remain robust.
It pointed out that monetary authorities still have enough room to keep its key policy rates unchanged or cut it by as much as 75 basis points to bring down housing mortgage rates down.
“Given the still very manageable inflation rates this year, well within its 2010 to 2011 targets, we think that BSP, not only has room to keep policy rates until fourth quarter, but would do well to ease further by at least 75 basis points, considering that the fiscal sector cannot contribute much to a second year stimulus lest it gets trapped into another debt spiral similar to that experienced in 2000 to 2004,” FMIC and UA&P added.
The study said the ultimate goal of the rate cut is to bring 25-year housing mortgage rates down to single digit levels, as this would significantly support a main driver of the economy – residential construction.
The BSP’s Monetary Board slashed its key policy rates by 200 basis points between December of 2008 and July of 2009 as part of an easing cycle to cushion the impact of the global financial crisis. This brought the overnight borrowing rate to a record low four percent and the overnight lending rate to six percent.
The board kept monetary policy unchanged in their Jan. 28 meeting but raised the rediscount rate on emergency window facilities by 0.5 percent to put it in line with the overnight borrowing rate.
Chief News Editor: Sol Jose Vanzi
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