Friday, October 24, 2008 Editorials: Propping up the economy
AMIDST the furor over the possibility of a serious American recession that could generate a global economic slowdown, there is a flurry among leaders in Asia to prepare their respective economies.
Toward this end, President Arroyo has proposed to set up a P100-billion fund to pump prime the nation’s economy and cushion undue effect of the expected US recession.
Earlier, the President revealed the setting up of a similar fund for Asia as agreed upon in Washington by Asean finance ministers, with the World Bank pledging a “$10 billion fund” for the purpose.
But the WB denied making such pledge. Yet, it would have strengthened the Asian economy against any possible effect of the global financial crisis.
Attending the 7th Asia-Europe Meeting (Asem) that opened in Beijing yesterday, President Arroyo is reportedly determined to push for the Asian crisis fund that she earlier proposed.
Economic crunch
The republic is starting to feel “the effects of the global slowdown,” a church-based labor group acknowledged the other day.
Some companies are no longer paying their workers the minimum wage in exchange for continued operation, while others are rotating their workers or reduced the labor force.
Even now, the tourism industry has acknowledged the possible ill-effect of the global economic slowdown, and is seeking to develop a resiliency in the industry to ensure its economic stability.
A possible recourse is the scaling down of the cost of travel in the Philippines and cutting down to whatever possible levels transportation fares, whether by land, sea, or air.
The domestic economy would be able to assume a healthier stance with the installation of a domestic, as well as an Asia-wide, financial support mechanism that business risk-takers can lean on in case they run short of investment capital.
Safety net
Indeed, the domestic support fund that envisions a joint public and private sectors undertaking should not be difficult to set up.
But there is need for a regional crisis support fund to have a “safety net” for our economy’s international exposure.
In the absence of such plank protection, Asian economy, including our own, would be direly vulnerable to the global economic downturn.
The President’s effort to set up both Asian and Philippine economic support funds is certainly heartening to the domestic economic scene.
