Looking up
Looking up
Updated 00:09am (Mla time) Jan 18, 2005
Inquirer News Service
Editor's Note: Published on page A10 of the January 18, 2005 issue of the Philippine Daily Inquirer.
THINGS are looking up for the economy, and unless something catastrophic occurs, 2005 should be a good year.
Last Wednesday the peso rallied to a five-month high against the US dollar, appreciating to the 55-to-$1 level on a burst of positive local economic news and expectations of increased foreign investment inflows. Last Friday, the peso continued to gain ground against the dollar, closing at 55.67 to the dollar, up from Wednesday's 55.91.
The bull run of the stock market started late last year and was expected to continue this week, with investor sentiment being supported by the stronger peso, increased export earnings and improvement in the government's fiscal position. Share prices rose last week on better-than-expected November export figures and a steadier performance overnight on Wall Street.
Exports grew at their fastest rate in more than two years in the 12 months through November 2004, rising 19.5 percent on the back of increased electronic shipments. Economists however see an uncertain environment for Philippine exports this year because of an expected easing in the global demand for electronics, which make up two-thirds of the country's exports.
The Bangko Sentral ng Pilipinas expects the country to attract more foreign portfolio investments or "hot money" this year. BSP Deputy Governor Amando Tetangco Jr. said some movement on key fiscal measures was convincing fund managers to put money in local investments. Investors, however, will monitor closely the development in the government's package of fiscal reforms, including several major tax bills in Congress.
A road show that started yesterday in Beijing and an international mining conference next month should attract interest in the mining industry in the Philippines. Trade Secretary Cesar A.V. Purisima said mining could become a major player in the national economy now that the industry has been given the green light to proceed with its investment promotion efforts.
The business community sees better prospects this year. Typical of the businessmen's sentiments are the views expressed by Raul Concepcion, consumer advocate, and Henry Schumacher, executive vice president of the European Chamber of Commerce of the Philippines. Concepcion predicted that "things will be better this year." But the President, he said, has to get her economic program and fiscal reforms going. Schumacher also sees better times ahead but stresses the need to address the fiscal problem decisively.
Budget Secretary Emilia Boncodin said there will be better times this year but this would be possible only with the adoption of fiscal reform measures and continued belt-tightening. She foresees an improvement in the government's fiscal position with the passage of the six tax measures that are expected to raise P50 billion in additional revenues. She also bases her optimistic forecast on a projected budget deficit of about P192 billion, which is lower than the target of P197.8 billion for this year.
Increased remittances from overseas Filipino workers should fuel greater activity in the economy, but only if a great part of the money is used for productive enterprises and not just for conspicuous consumption. The Department of Labor and Employment has said that last year's OFW remittances could reach $8.3 billion despite a minimal growth in workers' deployment. The government and the private sector have to get together to set up projects that would make the best use of the OFWs' remittances.
Another factor that could boost the economy is an expected increase in the number of tourists visiting the country this year as a result of the destruction by the tsunami disaster of tourist facilities in some South Asian countries last month.
On the security front, everything seems to be under control. Rumors of destabilization, coups or another Edsa event have remained rumors, and things are back to normal. We can only hope that political maneuverings will die down and that everybody will contribute their bit to insure national peace and stability, a factor that is crucial for economic growth to occur.
The executive branch will have to continue with its belt-tightening and fiscal reform measures. The legislature has to do its part by passing as soon as possible key fiscal and revenue bills. All of us have to continue to work, to curb our spending, to save and to put some of our savings in investments instead of letting them lie idle in banks, in safety deposit boxes or under mattresses at home. It's good to dream about a better year but all of us have to act and strive to make it a reality.
Updated 00:09am (Mla time) Jan 18, 2005
Inquirer News Service
Editor's Note: Published on page A10 of the January 18, 2005 issue of the Philippine Daily Inquirer.
THINGS are looking up for the economy, and unless something catastrophic occurs, 2005 should be a good year.
Last Wednesday the peso rallied to a five-month high against the US dollar, appreciating to the 55-to-$1 level on a burst of positive local economic news and expectations of increased foreign investment inflows. Last Friday, the peso continued to gain ground against the dollar, closing at 55.67 to the dollar, up from Wednesday's 55.91.
The bull run of the stock market started late last year and was expected to continue this week, with investor sentiment being supported by the stronger peso, increased export earnings and improvement in the government's fiscal position. Share prices rose last week on better-than-expected November export figures and a steadier performance overnight on Wall Street.
Exports grew at their fastest rate in more than two years in the 12 months through November 2004, rising 19.5 percent on the back of increased electronic shipments. Economists however see an uncertain environment for Philippine exports this year because of an expected easing in the global demand for electronics, which make up two-thirds of the country's exports.
The Bangko Sentral ng Pilipinas expects the country to attract more foreign portfolio investments or "hot money" this year. BSP Deputy Governor Amando Tetangco Jr. said some movement on key fiscal measures was convincing fund managers to put money in local investments. Investors, however, will monitor closely the development in the government's package of fiscal reforms, including several major tax bills in Congress.
A road show that started yesterday in Beijing and an international mining conference next month should attract interest in the mining industry in the Philippines. Trade Secretary Cesar A.V. Purisima said mining could become a major player in the national economy now that the industry has been given the green light to proceed with its investment promotion efforts.
The business community sees better prospects this year. Typical of the businessmen's sentiments are the views expressed by Raul Concepcion, consumer advocate, and Henry Schumacher, executive vice president of the European Chamber of Commerce of the Philippines. Concepcion predicted that "things will be better this year." But the President, he said, has to get her economic program and fiscal reforms going. Schumacher also sees better times ahead but stresses the need to address the fiscal problem decisively.
Budget Secretary Emilia Boncodin said there will be better times this year but this would be possible only with the adoption of fiscal reform measures and continued belt-tightening. She foresees an improvement in the government's fiscal position with the passage of the six tax measures that are expected to raise P50 billion in additional revenues. She also bases her optimistic forecast on a projected budget deficit of about P192 billion, which is lower than the target of P197.8 billion for this year.
Increased remittances from overseas Filipino workers should fuel greater activity in the economy, but only if a great part of the money is used for productive enterprises and not just for conspicuous consumption. The Department of Labor and Employment has said that last year's OFW remittances could reach $8.3 billion despite a minimal growth in workers' deployment. The government and the private sector have to get together to set up projects that would make the best use of the OFWs' remittances.
Another factor that could boost the economy is an expected increase in the number of tourists visiting the country this year as a result of the destruction by the tsunami disaster of tourist facilities in some South Asian countries last month.
On the security front, everything seems to be under control. Rumors of destabilization, coups or another Edsa event have remained rumors, and things are back to normal. We can only hope that political maneuverings will die down and that everybody will contribute their bit to insure national peace and stability, a factor that is crucial for economic growth to occur.
The executive branch will have to continue with its belt-tightening and fiscal reform measures. The legislature has to do its part by passing as soon as possible key fiscal and revenue bills. All of us have to continue to work, to curb our spending, to save and to put some of our savings in investments instead of letting them lie idle in banks, in safety deposit boxes or under mattresses at home. It's good to dream about a better year but all of us have to act and strive to make it a reality.
posted by Dante at 12:09 AM
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