Sun.Star Economic Forum

COMPARED to large industrialized nations, the Philippines was able to hold on to positive GDP growth rate of 0.4 percent for the first quarter of 2009 at a time of global recession, said Dr. Cayetano Paderanga, UP School of Economics professor.

Paderanga speaking before the Sun.Star Economic Forum at Casino Espanol on Wednesday said the credit slowdown in the US resulted in economy slowdown, affecting Philippine exports and OFW employment.

OFW deployment and remittances on a downtrend in later half of 2008 but went up by 2.7 percent in 1st quarter and three percent in 2nd quarter of 2009.

Paderanga said the Philippines can only put in place policies and programs to temper the effects of lower exports and remittances from Filipino consumers.

One of the key government policies is the P330-billion Philippine Economic Resilliency Plan. The plan will ensure sustainable growth, save and create jobs, protect the most vulnerable sectors (poorest of the poor, returning overseas Filipino workers, and workers in export industries), ensure low and stable prices and improve competitiveness.

Paderanga said the of P330-billion, P160 billion is for small, community level infrastructure projects and social protection measures;P40 billion for tax cuts and the scheduled cut in corporate income taxes; P100 billion is for for large infrastructure projects and P30 billion is for additional benefits to members by social security institutions.

Another key government policy Paderanga discussed is the increased efforts in the deployment of OFWs. This is done by hiring agreements with some host countries and training OFWs for healthcare, education, power/energy, and real estate sectors.

One key monetary policy needed, Paderanga said is a policy on rate cuts. He said the Bangko Sentral ng Pilipinas (BSP) has already slashed policy rates by as much as two percent since December 2008.

Managing exchange rate level and domestic liquidity are among the other monetary policies recommended for government to take.

Paderanga said other forces affecting the country’s recovery are the continued growth in the OFW remittances and the increase in OFW deployment; government’s pump-priming activities; foreign direct investments in agri-industrial sector, business process outsourcing sector, creative industries (film, design, music), infrastructure and logistics, manufacturing, mining and tourism and election spending.