Congress urges Malacañang to be pro-active amid global slowdown

Amid the global slowdown, the House Committee on Economic Affairs is urging Malacañang to be more pro-active in protecting the domestic economy and in re-orienting the economy towards greater self-reliance.

The committee report on House Resolution No. 834 calls on Arroyo government’s economic managers to prepare a roadmap and corresponding courses of action and to re-orient the economy towards greater self-reliance.

The report and proposed House resolution was the outcome of the Committee’s deliberations on House Resolution No. 428 authored by Bayan Muna Representatives Teddy Casiño and Satur Ocampo, Anakpawis Rep. Crispin Beltran and Gabiela party Representatives Liza Maza and Luz Ilagan which directed the Committee on Economic Affairs to look into the repercussions of the U.S. economic slowdown on the local economy, to determine the government’s level of preparedness, and to propose measures needed to mitigate any negative impact.

“The Committee endorses the need to reorient the economy and make it stronger by developing and strengthening domestic industries and modernizing agriculture, and to re-think the export-oriented, import-dependent model of development. This way, we can shield the economy from the vagaries of the international market,” the Committee said in its report.

The report also cited Casiño’s proposal to prepare for “radical” measures rather than continuing the “business as usual” attitude of the country’s economic managers.

The Committee puts forward the following recommendations: support local capital market growth through the passage of Credit Information System Act (CISA), Corporate Recovery and Insolvency Act (CRIA), Collective Investments Schemes (CIS) Law; and Real Estate Investment Trust (REIT) Act; diversify Philippine exports to “emerging, non-traditional markets” like India; forge “more equitable” trade agreements; and, further enhance the country’s competitiveness through increased infrastructure, lower transport and electricity costs, and better regulation and regulatory reforms;

Casiño debunked Palace projections of a high demand for laborers in Canada and the Middle East and its prospects for the local business process outsourcing (BPO) industry, stating that government contingency plans remain vague up to now and do not guarantee a reliable fallback for the sectors that may be hit by the U.S. economic crisis.

“While Malacañang’s economic managers insist that only a slowdown—not a recession, is expected in the country, the present global and domestic indicators manifest that a recession is going to hit us next year,” Casiño said.

He noted that the Philippine government recorded a balance of payments (BOP) deficit of $1.195 billion in October partly due to weak exports and costlier oil and food imports, while exports for 2008 and 2009 are seen to go down from the previous forecast of five percent and seven percent respectively.

Casiño also stressed that local businesses also report falling net profits, such as a double-digit drop in the profit of Philex Mining Corp., the Philippines’ biggest mining firm, the 43 percent lower profits compared to the same period last year of Ayala Corp., the Philippines’ largest conglomerate, the net loss of P2.5 billion in the third quarter net income of Bayan Telecommunications citing the weaker value of the peso that resulted in unrealized foreign exchange losses, and similar reported drops.(

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