Sunday, 20 September 2009

Philippine President calls for overhaul of global financial regulations

LONDON (PND) --President Gloria Macapagal-Arroyo on Friday called on the world’s leading economies to move for tighter financial controls to avert a repeat of last year’s market collapse that led to the global economic downturn.

In an interview by Bloomberg’s Laura Cochrane at the sidelines of the Emerging Markets Summit hosted by The Economist at the Intercontinental Park Lane here, the President cited the need for a coordinated approach by industrialized countries in overhauling global financial regulations.

“Governments the world over must insist that we come to grips with what happened and make sure to put in place rules so that it doesn’t happen again,” she said. “We cannot expect the poor in places like the Philippines to lose their shirt because someone on Wall Street made a bad debt.”

In stepping up her call for a new global financial regulatory regime, the President moved for not only a G-20 but even a G-30 meeting among leaders to include developing and emerging economies, saying they too have a stake.

She said the big difference between the 1997 world financial crisis and that of last year’s is that the latter shows much more dramatically the interdependence of the world and therefore, she said, the response must also be coordinated.

The President stressed that as a whole, Asia has benefited from the experience of the 1997-98 financial crisis. Because of that experience, she said, Southeast Asia became better prepared, its prospects for growth strong and signs of recovery are all over.

She warned however that if the global financial system does not learn from its mistake and embrace reforms, “all of us will lose even more than we have already.”

“And that is why I’m stepping up the call for a reform of the global financial regulatory regime,” she said.

The President stressed that one of the things that gives her confidence is the fact that foreign direct investment (FDI) in the Philippines posted an 86 percent increase in the first seven months of this year. There is also, according to her, the overall business confidence index computed by the central bank that has gone to positive territory for the first time since the third quarter of last year.

“We expect this trend to continue for the rest of the year,” she said. “Our stock and bond markets are growing. but the majority is from domestic investors so that shows confidence.”

Asked what she would still want to accomplish for the remainder of her term, the President said there is much yet to be done. “There’s a lot of things that we should do between now and when I leave the presidency because there is much to do to keep our nation moving forward, to keep our economy growing, to make sure our people are employed and our democracy is vibrant,” she replied.

The Chief Executive said that she will continue to invest in what she calls the 3Es – the economy, the environment and education, including pro-poor programs such as access to health care, job creation, and housing.

“In order to do all these we therefore have to translate our economic and fiscal achievements into real benefits for the people, we have to have the revenues to invest in a healthy economy so we have to continue with our fiscal reforms,” she said.

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