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MANILA, Philippines - President Aquino has ordered his economic team to closely monitor international economic developments and to craft measures that would shield the Philippines from the impact of a possible recession.
Deputy presidential spokesperson Abigail Valte said they are continuously implementing programs to mitigate the effects of the looming slowdown on the poor.
“The instruction of the President is to keep a close eye on what is happening globally. We have seen in the past few weeks the slowdown in other countries. We will watch closely what we can do and prepare so we won’t be affected by the slowdown,” Valte told state-run radio station dzRB yesterday.
Valte said the government already has programs to generate employment and to assist the country’s vulnerable sectors.
“Our (approach) is to create more jobs. Our CCT (conditional cash transfer) is still in place to help those who need it most,” the Palace official said.
“Our efforts do not stop there. The DPWH (Department of Public Works and Highways) and DSWD (Department of Social Welfare and Development) have tied up to launch the livelihood arm of CCT,” she added.
Valte said the program aims to provide jobs to the beneficiaries of CCT, which grants cash incentives to families who send their children to school and who avail themselves of health services.
She said the country’s economic projections remain “fighting targets.”
The government aims to expand the economy by seven to eight percent this year even as it assumed a five to six percent growth in its budget.
“The economic team is doing what it can to meet the target. We remain alert so we could avert the possible impact (of the recent developments) on our economy,” she added.
Fears of another global economic downturn have caused the buckling of international markets this week. The Philippine Stock Exchange index (PSEi) plunged to its lowest level in three years last Friday as investors chose to channel funds to safer US dollars and government securities.
The PSEi went down 210.14 points or 5.13 percent to close at 3,885.96, sustaining its biggest drop since Oct. 27, 2008.
At that time, the local bourse’s index dropped by 12.3 percent or by 239.66 points in the wake of the collapse of Lehman Brothers, which triggered the 2008 global crisis.
Major indexes in Asia, Europe and Latin America plunged by around five percent.
The recession panic also weighed in on the peso, which touched a seven-month low on Friday before recovering during the latter part of the trading.
The peso reached the P44 to $1 territory before closing at P43.58 from Thursday’s P43.77.
Fears of another economic downturn were raised after the Federal Reserve claimed that the US recovery is still prone to serious risks.
Analysts have said the possibility of another recession has raised anxiety among investors.
Even multilateral lenders have raised warnings about the prospects of the global economy and called on world leaders to avert a crisis.
World Bank president Robert Zoellick declared that the world “is in a danger zone.”
For her part, International Monetary Fund managing director Christine Lagarde said the economic risks have increased and called on countries to come up with an action plan.
Recent international developments are also seen to affect the Philippines’ economic growth, which posted a lower-than-expected 3.4 percent expansion in the second quarter.
The modest 3.4 percent growth was way below the government’s 4.5 to 5.5 percent and private analysts’ average projection of 4.9 percent.
“Global downside risks could hamper our growth prospects,” said Socioeconomic Planning Secretary Cayetano Paderanga Jr. in an earlier statement.
To mitigate the effects of a slower global economy, economic managers have vowed to boost domestic demand, fast-track fiscal spending, and take advantage of the benefits of the countries’ ties with its Southeast Asian neighbors.
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