REP. GMA WARNS OF DANGER SIGNS IN ECONOMY / FITCH UPGRADES PHL RATING

LUBAO, PAMPANGA, JUNE 26, 2011 (STAR) By Paolo Romero – Former President and now Pampanga Rep. Gloria Macapagal-Arroyo slammed yesterday the Aquino administration and warned of “danger signs” in the country’s economy because of what she claimed was a lack of leadership in government.

She said her hard-fought gains in the Philippine economy are being eroded by President Aquino’s lack of leadership and questionable economic policies.

The former leader aired the warning as the President is set to mark his first year in office with his favorable ratings slowly whittling away.

Arroyo said she was able to turn over to the Aquino administration a “new Philippines” with a sustainable growth rate that ended the country’s boom-bust economic cycle.

She said there were 10 years of uninterrupted growth even during the global recession with at 7.9 percent growth rate at its highest. She added that she stepped down with the country having automated elections, “which is the beginning of political reforms.”

“So today, a year later, the economy is still benefiting from that sustainable growth (set in place by previous administrations) but this is not to say that there are no danger signs—there are danger signs,” Arroyo told reporters in the Prado Farm here.

The former president said she turned over a very strong economy to the new administration even at the time there was a global crisis.

“Now when the rest of Asia is recovering, our economy is decelerating, so that’s the problem,” she said, citing a columnist’s comment that characterized the Aquino administration as “nobody home.”

Arroyo said inflation during her administration was the lowest “but now it’s going up.” The same is the case for self-rated poverty, she said.

The former leader also emphasized that even the Philippine scores on corruption is also going up while figures from the National Economic and Development Authority (NEDA) showed that foreign investments are down by half.

“Those were the danger signs so that’s why there is a need to decide what programs should be continued and what programs should be dropped, but work has to be done,” she said.

She stressed the gains her administration were built on the effort of previous leaders “because every administration should build on previous successes, continue programs that work.”

“Of course you may drop programs that do not work but as I said I left an economy that did no longer have the boom and bust cycle of the past because I was really focused on sustainability, that’s why I started my reforms with fiscal sustainability,” Arroyo said.

“I have to raise taxes even it’s unpopular and that doomed me to unpopularity already for the rest of my term. But I had to do that because we needed funds for health education job creation infrastructure and all the things that we need for sustainable growth,” she said.

Palace: Look who’s talking

But Arroyo’s commentaries did not sit well with Malacañang and immediately hit back.

“We find it unsurprising that Rep. Arroyo has chosen to try to make political hay when the sun isn’t shining,” deputy presidential spokesperson Abigail Valte said in a statement, after the press conference of the ex-president.

Valte said the former leader has “found time to try to obtain media mileage at a time that calls for the attention of media, the public, and the government on the current weather disturbance despite her glaring absence from proceedings inquiring into her culpability and accountability as president.”

“Rep. Arroyo essentially wants to be treated as a former president at a time when no one has denied her the courtesies due her formerly being chief executive,” the Palace undersecretary added.

Valte said Arroyo seems to confuse official courtesy with the hallmark of her stay in power, which is impunity. She said the Palace believes that her press conference was merely a ploy to deflect attention from her refusing to submit to proper procedures for ascertaining accountability.

“She may well be unused to the idea of an independent Ombudsman in the near future; and furthermore, upset that the time of her being above the rules and beyond accountability is finally over,” she said. – Delon Porcalla

Rep. Gloria Arroyo- 'I do not miss the presidency' - Posted by PML on 14:59 in Gloria Arroyo, Kapuso Mo Jessica Soho, Nation, Politics, SONA 'State of the Nation' reports on Gloria Macapagal-Arroyo's first birthday outside the Palace after nine years in the presidency. In a one-on-one interview, now-Pampanga Rep. Arroyo shares her sentiments with anchor Jessica Soho on her perceived "demotion" to the House of Representatives.ON YOU TUBE: http://www.youtube.com/watch?feature=player_embedded&v=G7Wl0wS4HWQ

FROM MANILA TIMES June 24, 2011 12:09 A.M.

Investment phenomenon and the Fitch upgrade

TWO things are happening that have not happened for a very long time in our country. These two things have remained unnoticed by most media commentators because they are so eager to dwell on either of two subjects they think readers and audiences love: criticism of the Aquino administration’s failings or defending the President and making excuses for his alleged failings.

Both things make up a big part of the reason Fitch Ratings Inc., one of the world’s three major firms that determine whether a country or a corporation is a good credit risk and worth investing in, has raised its assessment of our country to a level just one step below investment grade. They are also why the other two rating firms, Standard & Poor’s and Moody’s Investors Service, have also upgraded us though not to the level Fitch raised us the other day.

Surge in investments

The first of these two things is the surge in investments.
This surge is a result of our country’s “sound economic fundamentals” (which we had also during the years of former president Gloria M,. Arroyo’s presidency, including our large foreign exchange reserves thanks to our Overseas Filipino Workers). The surge is also a result of the Bangko Sentral’s good policies. But the investment surge is most of all the fruit of people being confident that under President Aquino things will go well and improve to a level we have never enjoyed before.

This confidence is not only found among the masses (the 7 out 10 Filipinos who are pleased with Mr. Aquino’s performance and moral leadership) but also among businessmen. And among people abroad and the foreign chambers of commerce based here.

In the nearly one year that PNoy has been our president, private (not government) domestic investment has been rising. This is a reversal of the situation of decades. Investment in the Philippines has grown 37 percent in the past four quarters.

But it is not foreign direct investment that has caused this surge. In fact FDI this year compared to last year has declined, according to the Bangko Sentral, by 17 percent. And our economic zones built largely for foreign locators — the various sites of the Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority (SBMA) and Clark Development Corporation and the Board of Investments which grants FDI exemptions and incentives—have altogether experienced a 53 percent decline in new investors.

Neither is it government investment in infrastructure projects, new ports, and such things that has caused the investment surge. In fact, the Aquino administration is being criticized for not releasing funds for these public investments. Spending on the approved infrastructure projects would indeed create hundreds of thousands of jobs. That would shrink the unemployment rate which, according to the latest Labor Force Survey results issued by the National Statistics Office, slowed to 7.2 percent in April 2011 (down from 8 percent in April last year). More employment would also reduce the poverty and hunger counts.

Filipino investors brought about the surge Definitely, it is not government investment that has caused overall investment in our country rise to by 37 percent. The investment surge was brought about by private-sector Filipino investors. And this is the second thing that Philippine media has by and large not noticed or played up.

This new phenomenon changes the Philippine investment picture a great deal. Apparently, there were years when we did not even have a single new investment—whether foreign, government or private sector. From now on, we hope, we Filipinos are becoming similar to the people of the other Asean countries whose locals show their confidence in their own countries by investing in projects.

Foreigners are deterred from investing here not just by high electricity rates and difficulties in doing business but also by the knowledge that Filipinos invests very little of their money in their own country. Now, in the first year of President Aquino’s presidency, that characteristic of our economy has changed.

An even more astonishing development The former National Economic Development Authority chief, Mr. Cielito Habito—in his latest Inquirer column “No Free Lunch”— has pointed out something even more astonishing about what he calls “Aquinomics.”

The administration’s “underspending” has caused less projects to be launched. Yes, it has allowed President Aquino to boast having greatly reduced the deficit and even report a budget surplus. This is again another reason for the credit-rating upgrade the Philippines has been getting from Fitch, S&P and Moody’s.

Writes Mr. Habito (who was once a Times columnist): “At face value, the drop in government spending appears to be a downside to the Aquino government’s performance. Data from the Department of Budget and Management (DBM) indicate that disbursements in the first four months of the year were P60.5 billion or 11.6 percent lower than in the same period last year. Some observers now fault the new administration for “underspending,” for indeed, not only has it spent less than it did last year, it has also spent even farther less than what had been programmed to be spent by this time. But before casting this government as inept and lacking absorptive capacity, one must remember that this year’s budget was still drawn up by the previous administration. And if the current government has been more prudent about spending the money, it could well be because they have found that they don’t have to spend as much as the former government would have, to accomplish as much.”

And it does seem that more transparency, vigilance against corruption and sound cost-cutting at the Public Works department, for one, has allowed the government to save more than P2 billion while doing as many projects as the previous administration.

The President’s praise of DPWH Secretary Rogelio Singson was apparently well-deserved.


Chief News Editor: Sol Jose Vanzi

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