Saturday, 4 July 2009

Philippines optimistic, positions for economic rebound

Tacloban City (PIA) -- The Philippine economy is on the rebound and is seen to be "moving upwards" towards the end of the year based on the conservative gross domestic product (GDP) growth forecast of 0.8 to 1.8 percent.

This report was first heard at the end of April during the media briefing conducted in Tacloban after the Cabinet Meeting presided by President Arroyo at the Tacloban City Airport's VIP Lounge on April 28.

This good news was presented by Deputy Director Rolando Tungpalan of NEDA who was assisted by Director Dennis Arroyo, also of NEDA, who reported the results of the Global Recession Impact Monitor (GRIM), a monitoring system set up on the instructions of the President to ensure that the global recession would not become a Philippine recession.

The formation of the Global Recession Impact Monitor (GRIM) is in line with the government's efforts to make sure that the Philippines would not slip into recession like two-thirds of the world.

In a joint press briefing on June 26 with Cabinet Secretary Bello, Deputy Director General Rolando Tungpalan said that in the first quarter, "we already saw a growth of positive 0.4 percent, which is expected to rise further until the end of the year".

Talking about the first quarter performance which some quarters claimed there would be declining overseas remittances, official statistics do not confirm what these projections are saying. Nevertheless, the government will not be complacent and will continue with its infrastructure investments, Deputy Director General Tungpalan said.

Business and consumer surveys indicate a growing upbeat sentiment. The precautionary savings that was felt in the first quarter was a very natural reaction of households because during uncertain times you don't know to what extent people take those precautionary measures, the Deputy Director General added.

The warning made by former Budget Secretary Benjamin Diokno of a 30 percent contraction in exports, is higher than the assumptions made by the International Monetary Fund in predicting the recession for the Philippines, the NEDA Official said.

"Based on the report of the exporters and the export captains, we are seeing a decline lower than what we expected. The numbers we are reading are about 13 and 15 percent, rather than the 18 percent (we projected) on the high side."

"The import figure of April increased, the contraction was greater than the previous month of 37 percent versus 36 percent. Again, the export sector was surprised why the numbers were lower. The imports contracted whereas they were expecting it to grow over the exports. Orders have been made in April and May," he said.

On credit rating agency, Moody's rethinking its credit rating for the Philippines in view of the decline in GDP rates, Tungpalan said, that "most of these assessments are based on the first quarter modest growth and we keep stressing the fact that the first quarter does not reflect the rest of the year's performance."

"We expect the economy to move upward. Even China has a very impressive first quarter growth at 6.1 GDP. In fact, Asia itself is now a very strong market for the Philippines. President Gloria Macapagal Arroyo has been instructing the economic managers to look at the opportunity of relating more with China than with our usual dependence with the North," he said.

Asia, widely considered as a very rich area, has prospects of expanding its economy. With a strong domestic economy, a strong export market, this means well for our sustainable growth, Deputy DG Tungpalan added.

With the measures the government has meticulously put in place, the Philippines is optimistic that the economy will continue to grow.

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