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Thursday, November 04, 2004
RP emerging from fiscal crisis: Arroyo
BELIEVE it or not, President Arroyo Wednesday said the Philippines is getting out of the fiscal crisis and that Filipinos can look forward to a good Christmas.
Arroyo made the statement during a visit to the GMA 7 Network Center in Quezon City, where she talked with the media agency's top executives and asked them to preach the good news. She is expected to make the same pitch during subsequent visits to other news organizations.
"We are now getting out of that crisis and I told my Cabinet members, let's not talk crisis anymore. We gave the alarm, we rang the alarm bell and the people and the institutions responded. Isn't that great? Isn't that a great source of optimism for our country? So now, we're prepared to have a good Christmas," she said.
"I think this Christmas should be a happy Christmas because as I said, having sounded the alarm last September, I see institutional and individual responses," she added.
Arroyo declared that the Philippines is "in the midst of a fiscal crisis" last August 23, not September, at the turnover ceremony in Camp Crame for the PNP.
Arroyo told GMA 7 executives that "fiscal crisis" is different from "economic crisis."
"I didn't call it an economic crisis because our country has been growing faster than our neighbors in the last three 1/2 years of my administration. So you can't call that a crisis. We have been creating one million jobs a year or more. So you can't call that an economic crisis. So the crisis was really on the fiscal front only," she said.
She said she used "fiscal crisis," meaning the national debt is too big in proportion with the growth rate to be able to attain her administration's goal of cutting the poverty rate from 34 per cent in 2000 to 17 per cent in 2010.
She said since she made the announcement, a number of public and private persons and government agencies have risen to the call to help solve the fiscal crisis and a number of things have happened.
She said less interest was paid in the past month for the country's debt compared to expectations, partly due to austerity measures including P1 million in savings from Malacañang.
She also said the stock market has breached the 1,800 level - a sign of business confidence - and the House of Representatives has just passed the sin tax bill, which many creditors are waiting for.
"These new developments after I said we're in the middle of a fiscal crisis, I think, gives room for optimism," she said.
But she admitted that government still has much to do to reduce the debt and raise the growth rate.
Arroyo said the debt could be reduced by lowering interests and spreads on commercial papers, rely more on official development assistance (ODA) instead of borrowings from the bond market, and transfer the borrowings from the National Government to local government units (LGUs) and government corporations based on their own credit worthiness.
She said the growth rate could be raised by increasing investments through fiscal reforms, ensuring reliable power supply and giving industries competitive rates, providing more infrastructure, and curbing smuggling, red tape and corruption.
She said the House ways and means panel has agreed to "consider very favorably" in the bicameral conference committee a stronger version of the Senate on the increased taxes on alcohol and cigarettes.
She said she is "halfway through writing" the additional powers of Jose Calimlim, board member of the Subic Bay Metropolitan Authority and president of the Subic Freeport Services Inc, as head of an anti-smuggling task force.
"He knows who he is going after. They're big names and he is already putting his team together including a revamp of the customs in Subic," she said.
She said the cases against former Armed Forces comptroller Maj. Gen. Carlos Garcia are "quite an achievement" and "a first as far as the fight against corruption is concerned."
The cases against Garcia were prompted by the US Government's submission to the Ombudsman of documents on the alleged unexplained wealth of Garcia.
Trade Secretary and Palace economic spokesman Cesar Purisima said the debt situation is "actually manageable" because 85 per cent of the $57 billion debt is medium- to long-term and only 15 per cent is short-term.
"When you look at that, there's so much room for solving our fiscal situation and therefore, I think the important thing is not in the names that we call the situation that we're in but in what we are doing to solve the situation. So it doesn't become more difficult than it already is," Purisima said.
"This is a difficult situation but clearly manageable and what we need to do is work together as a country, as a people, so that we can come up with solutions to this issue," he said. (JMR)
(November 4, 2004 issue)
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