Monday, December 31, 2007 Traders see 7-7.5% GDP for 2008
MANILA -- Business executives expect gross domestic product (GDP) growing by 7 to 7.5 percent in 2008 depending on the country's ability to make the economy competitive, particularly in the area of energy, infrastructure and reduced cost of doing business.
This optimism was expressed by Donald Dee, chair of Philippine Chamber of Commerce and Industry (PCCI), the largest business organization in the country.
"We are basically optimistic despite the strong peso and weakening of the US economy. Such could be offset by making the economy competitive through working very hard on measures to bring down energy cost to a competitive level," Dee said.
He said they are concerned about the privatization of the National Transmission Commission (Transco) and the implementation of the Electric Power Reform Industry Act (Epira).
"This is something that worries us. It's not who should win and who should lose. I think the very big issue is--should we really privatize Transco? And if we are going to privatize Transco, let's begin to talk about the safeguards and the process especially in rate setting transmission charges," he said.
Dee also cited the need to fast track the guidelines on the appointment of independent power producers (IPP) administrators so more players could come in once there is open access.
Open access allows companies to buy their power directly from power plant operators that allow the end-users to negotiate electric rates.
The open access program, which is part of the Epira, would pave the way for a more vigorous involvement by private investors in power generation, transmission, and distribution in Luzon, Mindanao and the Visayas.
Two to three more power generating plants sold to private investors will pare down the total capacity of generating assets of National Power Corporation (Napocor) in Luzon and Visayas would enable the country to attain open access.
Napocor already achieved 48 percent of the total 70-percent privatization requirement to allow power plants to sell directly to consumers.
To make the Philippines attractive to more investors, Dee underscored the need to simplify the cost of doing business particularly in local governments.
He noted that the Bureau of Customs' electronic data encoding, x-ray machines, and single window transactions likewise would reduce under-valuation and improve tax collections.
Likewise, Dee said the government should continue investing in infrastructure and ensure good governance.
Infrastructure development is among the deciding factors of investors in pouring in their money in the country.
The country's GDP is projected to reach 7 percent this year. GDP for the first three quarters already averaged 7.1 percent. (Philexport)
