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Thursday, January 27, 2005
Editorials: Positive economic indicators
Unless an unexpected monkey wrench is thrown into the initial movement of the economy in the first month of 2005, it does look like the country is off to a heartening start.
Early this week, the peso rallied against the US dollar “to a year high of P55.40,” riding on the crest of a “strong influx of portfolio investment” that powered the “Philippine Stock Exchange composite index past 2,000 (points) for the first time in five years.” The closing of the peso last Friday at P55.545 to the dollar was said to be its strongest finish since Jan. 13, 2004.
A Union Bank chief foreign exchange dealer said that the driver for the peso is the equity flow. “Look at the volume and the level of the stock market. Those are nothing you have seen in the last five years.”
The resurgent strength of the peso over the dollar was fuelled by investor confidence that the government is exerting all efforts to improve its revenue collection. The lateral attrition bill that the President just signed into law and the sin taxes have prompted the lowering of the budget deficit target this year from P184.5 billion to P177 billion.
On top of this “wave of recent positive economic indicators and a vibrant corporate outlook” is the expected release soon of Gross Domestic Product figures that would likely show a growth rate of 6.1 percent, outpacing government’s target of 4.9 – 5.8 percent. This rate was attained despite the country’s rather unflattering political condition.
Add to this the estimated P30-billion collection of government fees and increase in charges that line agencies and state-owned firms impose, and you have a stirring portrait of the nation’s economy trying to surge again.
Only our national leaders masochist politics can probably pour cold water on the positive portrait of the national economy.
Southern growth potential
As if on cue, Visayas and Mindanao also revealed certain aspects that can be pushed to help the national effort to stabilize the economy and enhance the opportunity for further and faster growth this year.
From Mindanao comes the report that the investments that trickled to the area the past month have fuelled the hope that the region could post a “record economic growth this year.” Improved peace and order condition has raised business confidence on the area.
Eastern Visayas, on the other hand, showed a revitalized coconut industry, with 1.7 million coconut farmers standing to benefit. The Philippine Coconut Authority said there is marked resurgence of interest in coconut products such as copra and oil.
Finally, the National Economic and Development Authority has asked the government for P1 billion in investments to “maximize the potentials” of the tourism industry.” It aims to position the Philippines as a top tourist destination.
(January 27, 2005 issue)
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