FROM MALACAÑANG:  ON THE RIGHT  TRACK

MALACAÑANG
, February 7, 2005
(OFFICE OF THE PRESS SECRETARY) (For the week ending February 6, 2005) The peso is on a roll and if confidence in the economy and the political leadership continues, BSP officials predict our currency will hit stronger levels. In the past, critics have been quick to blame the President for the weakening of the currency, but now that our currency and also the stock market are rebounding these same critics tend to downplay them. Their question now is: But how does that affect the ordinary Filipino?

If you are looking for instant gratification, I am afraid you will not find it. Not just yet. It takes time for these happenings to be felt at the household level.

But in the case of the stronger peso, the ultimate effect will be cheaper goods specially those with imported components. Note that we are a net importer. We import more than we export.

Instead of paying 56 pesos for the same quantity of imported raw materials, we will now be paying only 54 pesos. Eventually this will translate into lower cost of manufactured goods.

Oil constitutes a significant portion of our imports. By all reckoning, we should see prices of gasoline and diesel coming down, not just because of the stronger peso but also because the price of oil in the world market is also coming down.

Same should be true for electricity, because a major component of our electric bills is the foreign exchange fluctuation.

The thing to do now is to be vigilant like Ronnie Concepcion. Let us make sure that the currency fluctuation which has suddenly turned in our favor is likewise credited to the consumers.

Less palpable to the ordinary consumer would be the effect on our foreign obligations. For every dollar owed, we will be paying only 54 pesos instead of 56 pesos. If we are talking of a 1 billion dollar obligation, that would mean savings of P2 billion pesos right off the bat.

Ultimately these savings would translate into bigger allocations for medicine, schools, water and electrification.

All of these developments can only mean that President Gloria’s economic and fiscal reforms are on the right track.

We are reaping the fruits of our labors and sacrifices as well as the political will to implement urgent reforms. Let us not lose the momentum and opportunity to cross the threshold so that it will never be said again that the Philippines is the economic basket case of Asia.

Instead of always shooting ourselves in the foot, let us pull together for once. We will all be surprised at how much faster we, as a nation, can move forward.

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The raging public hearings and debates on the VAT only goes to show that we are a maturing working democracy. There is a genuine desire on the part the Executive and of Congress to listen to the legitimate concerns of all important stakeholders of the national interest and the general welfare.

As Senate President Frank Drilon said, all interested parties can just come to the Senate and present their views.

All well meaning debates should be welcome. After all, we are all on the same boat in wanting our country to move forward. Our legislators are working for more efficient tax collection. What is important is that at the end of the day, our legislators would be able to craft a VAT system that is both progressive and pro-poor.

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The issues and concerns on mining are fully acknowledged by President Gloria. Safeguards and safety nets are incorporated in the mining plan, especially when it pertains to the environment and the rights and entitlements of affected communities. The just share of local government units in the proceeds of the utilization of mineral resources within their territories will be guaranteed. After all is said and done, let us remember that all those mineral resources will be useless to us and to future generations if they remain below the ground.

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Reported by: Sol Jose Vanzi

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