Economy ‘is in no way threatened’ by crisis

ECONOMIC managers in the Duterte administration assured that martial law won’t derail the country’s growth track, even as the authorities try to quell a crisis in Marawi City.

Finance Secretary Carlos Dominguez on Thursday said the country’s growth momentum remains on track and that the decision of President Rodrigo Duterte to declare martial law in Mindanao was meant “to quickly and decisively contain the threats of lawless elements in a limited area distant from the island’s major business centers.”

“The economy is in no way threatened by the imposition of martial law. The military is in full control of the government installations and major infrastructures on the island,” Dominguez said in a statement.

“Martial law will ensure that these facilities are protected so that business transactions will be unaffected,” added Dominguez.

The finance chief added that martial law in Mindanao for a limited period is intended to protect the flow of commerce, protect the innocent, and eliminate future threats to the communities.

President Duterte declared martial law for 60 days, the maximum period allowed under the 1987 Constitution, and later told congressional leaders that he did so to stop “a clear attempt by terrorist groups to establish their seat of power” in Mindanao.

Joselito Basilio, acting deputy director of the Bangko Sentral ng Pilipinas (BSP) economic research unit, said during last Thursday’s economic briefing that the country’s economy remained resilient despite both internal and external challenges.

He believes that the economic growth is here to stay, driven by multiple homegrown “anchors of resilience” such as a strong inflow of overseas remittances and impressive growth in manufacturing and information technology/ business process management (IT-BPM) industries.

“The economy has sustained 72 quarters of uninterrupted expansion,” said Basilio.

Temporary caution

He assured that the country’s banking system has a sufficient buffer to mitigate adverse impacts from shocks, if any.

Bangko Sentral ng Pilipinas Gov. Amando Tetangco was earlier quoted as saying that the declaration of martial law in Mindanao could lead to “some transitory or temporary cautiousness but it will be leading to positive impact sentiment” as the objective is to improve security.

Among the risks and challenges faced by the country are political uncertainty overseas such as from the Brexit and China’s economic slowdown; severe weather disturbances; and infrastructure gaps.

“Given the uncertainties ahead, we are prepared,” said Basilio, referring to the country’s “ample monetary and fiscal spaces” for more spending, especially on infrastructure projects.

Mandaue Chamber of Commerce and Industry president Glenn Anthony Soco, one of the reactors during the forum hosted by Cebu Business Club, said economic uncertainties are already factored in, in the country’s setting of economic targets, and that any negative effects of the martial law declaration would be temporary.

‘Timely position’

“This will not have any negative impact on our growth. Based on the BSP and NEDA report, they have factored in already these ‘noises,’ which are considered temporary. We are still the best performing economy in Asia and investors are most likely not to change their minds in investing in our country as they are aware already of the risks and the situation,” said Soco.

He opined that the declaration of martial law is a proactive and timely position that projects decisiveness, control and sincerity in solving the crisis in Mindanao.

“Terrorism is still and will continue to be the real threat in this generation,” he said.

Dominguez pointed out that the economy is expected to grow by 6.5 to 7.5 percent during the year, with both internal and external demand contributing evenly to growth.

Trade Secretary Ramon Lopez also assured foreign investors that it is “business as usual” in the Philippines despite the martial law declaration in Mindanao.
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