LONG ROAD TO NORMALCY: FILIPINOS SHOULD BRACE FOR TOUGH TIMES AHEAD
MANILA, OCTOBER 6, 2008 (STAR) By Paolo Romero - Filipinos should brace for tough times ahead as it would take some time before the slowing global economy recovers despite the implementation of the $700-billion financial rescue plan in the US, Malacañang said yesterday.
Press Secretary Jesus Dureza said US President George W. Bush’s signing of the landmark bailout package signals the “start of a long process of economic recovery and confidence” but warned that the Philippines should continue to brace itself for rough times to weather the financial crisis.
“It will still be a long road to normalcy,” Dureza said even as he gave assurances the Arroyo administration would undertake massive infrastructure and social spending to continue to spur economic activity in the country.
“There will be hard times for many sectors and the Philippines will have to continue to brace itself, like all other countries of the world, to weather this crisis,” he said. “Our innate resiliency, Filipino resiliency will keep us afloat.”
“While President Arroyo has set in place early on some economic fundamentals that helped the country ride out the storm, we nonetheless should all continue to stay the course,” Dureza said.
He called on families to spend wisely but added the government, with cooperation from the private sector, would exert efforts to boost consumer and business confidence in the economy.
He said the government would also do its best to stave off pressures on inflation.
“We must return the trust and confidence of the public on the economy and put stability in the financial system,” Dureza said.
He warned, during an interview at dzRB, that many economic factors remain volatile and “can move anytime so we have to be ready for possible problems.”
He said pump priming would help the country’s economy to keep on going despite recession in other major economies.
Dureza, however, said the key to insulating the country from a global economic slowdown is the early passage of the proposed P1.4 trillion national budget for next year.
He said the government is also encouraging the export sector to tap other markets other than the US. Exports account for about 30 percent of the country’s GDP. Other markets that should be tapped would be China and India, he said.
Dureza also said the country would also rely heavily on remittances from overseas Filipino workers to help shore up the economy.
“These (remittances) would continue to be our main backup. No matter what happens, we have something solid to lean on. Our OFWs are our heroes,” he said.
Economic managers last week said the Philippines was in a better position to weather the crisis due to its strong macroeconomic fundamentals, including a declining deficit and an increasing savings rate.
Optimistic Vice President Noli de Castro also expressed confidence that the US economic crisis will not slow down the housing sector in the country as shelter agencies are studying the market environment very closely.
Although he is confident that the housing sector will not fold up, De Castro, chairman of the Housing and Urban Development Coordinating Council (HUDCC), said he has already asked the National Housing Mortgage and Finance Corp. (NHMFC) and the Home Guarantee Corp. (HGC) to study the market environment very closely as precautionary measures.
He said the lessons learned by local housing from its past mistakes have made the sector stronger today.
“We’ve been there before and back. We know better. The housing sector has gone through a similar crisis in the past. In fact, we are a decade ahead of the Americans in creating a housing mess,” De Castro said.
Such effort to monitor the market, he said, is related to their plans to issue the first mortgage-backed securities since the recent events may have an impact on the undertaking.
He said the NHMFC and the HGC also need to review the housing policies to find out if there are loopholes that can lead to financial problems in the future and to identify measures that could be put in place.
De Castro was referring to the time when the Unified Home Lending Program collapsed and the Asset Participation Certificates or APC-funded projects crumbled.
He added that the situation could have been averted if the proper regulatory environment was in place or if the major financial institutions managed risk-taking in a prudent manner.
“In other words, if good governance principles were truly practiced, maybe the financial crisis could have been averted,” he said.
According to De Castro, everything is in place to keep the housing sector moving forward because reforms are being stepped up especially in areas where red tape is involved, such as in the processing of housing permit.
Red tape is being addressed by the One-Stop Shop and the Office of Primary Responsibility systems of the Housing and Land Use Regulatory Board (HLURB).
He said there is continuous disposition of the remaining non-performing assets to beef up housing fund. In relation to this, De Castro has invited the developers to support the mega housing fair of HUDCC on Oct. 29 to 31 at the SM Megamall.
The Vice President also vowed to sustain reforms for a more effective implementation of the national program for the informal settlers such as the beneficiary-led resettlement policy of the National Housing Authority (NHA) and the targeted subsidy initiatives under the Community Mortgage Program (CMP) which will be initiated by the Social Housing and Finance Corp. (SHFC).
“Under these policy and programs for the informal settlers, clients with greater need would be targeted and prioritized, thus paving the way for a more efficient use of the government’s limited funds for housing,” he said.
An invite to revolt
Meanwhile, Catholic Bishops’ Conference of the Philippines (CBCP) president Archbishop Angel Lagdameo warned of public uprising if the government imposes new taxes amid the global economic slowdown.
Lagdameo said the government should think of other ways to cushion the impact of the economic crisis aside from “burdening” the public with new taxes.
“The government should think thoroughly before venturing into any proposal because in the end, they might not be able to stop the Filipinos – and this will be the final straw for Juan dela Cruz to break out and revolt,” Lagdameo said in an interview over Church-run Radio Veritas.
He said new taxes would mean additional suffering for members of the lower class.
“The solution they are considering will not help. It is not right for the government to think of imposing new taxes now, at a time when the country is faced with an economic crisis,” he said. — Pia Lee-Brago, Helen Flores
Chief News Editor: Sol Jose Vanzi
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