Phil. Chamber of Commerce Release
Philippine Chamber of Commerce and Industry
PRESS RELEASE
April 17, 2000
NEDA & PCCI AGREE: BUSINESS PROSPECTS NOT ‘GOOD’
---- IT’S ACTUALLY ‘BETTER’
Government’s economic weatherman, Dr. Felipe M. Medalla of the NEDA,
forecasts generally sunny weather for the most part of this year, placing yearend
GDP at 4% or better. During a consultative workshop on Regional Development
organized by the Philippine Chamber of Commerce and Industry (PCCI), Medalla
belittled conservative estimates by government critics and even that of the Makati
Business Club (MBC) which predicted a best-case scenario of 3.5 %.
“GDP plus overseas remittances, we could do as well as 4.5%,” Medalla said.
“Well, I say at least 4%, meaning that there is at least one percentage point
between me and [MBC Executive Director] Bill Luz,” the National Economic
Development Authority (NEDA) Director General said.
for the first quarter will be announced late May.
Medalla said the GNP
“We’ll know in about two to
three months whether I’m right or he’s wrong,” he added. Medalla said he is
very confident that growth of GDP in the first quarter will be 4% or higher, and
that MBC will have to upgrade its forecast.
“Well, in the matter of the forecast war, I believe we shall have to cast our vote in
favor of Secretary Medalla’s,” PCCI President Miguel B. Varela said.
“In the
course of the workshop, we conducted a flash survey among the regional leaders
of industry there represented. . . . .
and we found an overwhelming tide of
positive impressions about the way things are,” Mr. Varela said. In the flash
survey where the regional delegates were respondents,
not even the BW
scandal which rocked the PSE succeeded in churning out a negative prospect for
the future, as far as this sample size was concerned.
“In fact, 77% of us felt
that the ongoing investigation being conducted by the PSE and the SEC on
trading procedures will actually result in a stronger and more credible stock
market,” Mr. Varela said.
The rest of NEDA’s prognoses were: single digit inflation; average foreign
exchange rate at US$1: PHP 41; growth in agriculture at 3 to 3.5% (lower than
1999 figure because that year, the sector was rebounding from a low rate for
1998); growth in the services sector at 4.5%; growth in manufacturing at 3%;
growth in construction at 3%; export growth at a conservative estimate of 14%.
Secretary Benjamin E. Diokno of the Department of Budget and Management
(DBM), meanwhile, reported that between July 1998 and December 1999, the
government was able to pay off a large chunk of the accounts payable it inherited
from the Ramos Administration--- to the tune of PHP 200 B. Diokno said that by
the year 2004, he expects the economy to post a real surplus. “Because it’s very
easy to come up with a surplus--- by not paying your contractors and suppliers,
for instance,” he said.
Privatization efforts are also expected to rake in at least
PHP 22 B. The best news for the regions, however, was that the largest chunk
of the budget—30% is earmarked for economic services.
The most significant
portion of this, some PHP 36.7 B, will be spent for agricultural modernization.
Reacting to the privatization issue, Varela comments, “The shape up or ship out
policy of the government on Government Owned and Controlled Corporations
(GOCCs) is one way of getting us ready for global competition,” Varela said.
“This will force the issue of efficiency on these companies. We can’t afford to
have basic utility companies that are flabby,” he adds.
The Philippine Ports Authority (PPA) bared its priorities during the workshop:
building and / or upgrading ports in regions whose full trade potentials are yet to
be tapped--- specially in the Visayas and Mindanao.
Among the priority areas
are Iloilo, Davao, Zamboanga and General Santos.
Implementation of these
projects will be between now and 2004, according to PPA General Manager Juan
Pena. “It was reported by the Economic Intelligence Group of Peter Wallace that
the poor condition of our ports is one major factor that goes against our favor
when companies look for potential trade partners,”
Mr. Pena said.
The
resuscitation of the Pan-Philippine Highway is also seen as something which will
contribute to the encouragement of inter-island port activity. Pena also bared
government’s plans for creating an ASEAN trade highway which is hoped to
further link the regions not only to the major cities within the country, but even to
neighboring economies.
“There is no better time than now to address the disparity in productivity in the
centers of economy versus the regions. From the viewpoint of national welfare,
the benefits that government and the private sector are able to reap—need to be
spread around. . . . and made to trickle down the length of the archipelago,” the
PCCI president said.
PCCI is part of the Economic Consultative Committee which involves the private
sector in the formulation of economic policies.