‘Speed up public infra’

Saturday, March 7, 2009

Debra M. Estero
Sun.Star Reporter

ECONOMIC growth is expected to slow down further this year as the country’s economic managers admitted that the global economic meltdown has hit home.

“We don’t know where the bottom of this thing is,” Socio-economic Planning Secretary Ralph Recto said, referring to the global crisis that brought more than two-thirds of world economies in recession.

“This year, the global crisis continues to weigh heavily on the economy. The recession in our trading partners has hit our exporting sector hard,” Recto said during an economic briefing hosted by the Bangko Sentral ng Pilipinas (BSP) yesterday at the Marco Polo Plaza.

Recto was joined by Agriculture Secretary Arthur Yap, Trade Secretary Peter Favila, Budget Secretary Rolando Andaya Jr., Finance Secretary Margarito Teves and Undersecretary Melinda Ocampo of the Department of Energy (DOE) to present the country’s economic prospects this year during the briefing.

Recto said that among the risks and challenges facing the country are slower economic growth, contraction of the export sector that will result in more job losses, decline in the volume of remittances as several overseas Filipino workers have lost their jobs, a weaker exchange rate, and tighter credit market.

Weakened

National Economic and Development Authority (Neda) 7 Director Marlene Ca Rodriguez reported that the export sector in Central Visayas has been weakened by the effects of the US recession.

“The slowdown of exports in Central Visayas has resulted in retrenchments and closure of export factories,” she said, adding that the labor market in the region continues to be at risk at present.

Based on data from the Department of Labor and Employment (Dole), over 22,000 workers in Central Visayas have been affected by permanent or temporary company shutdowns while 17,942 more have been affected by flexible wage
arrangements.

The Neda listed electronics and furniture exporters as the main export “losers” from September to December last year.

Still, the government economic team assured that the government will implement a number of programs and measures, which include a P300-billion stimulus plan, to counter the effects of the global crisis on the Philippine economy.

Public spending

The P300-billion Economic Resiliency Plan (ERP) aims to sustain economic growth and create jobs through increased government spending in public infrastructure and social services.

“In the Philippines, the most potent response (to the crisis) is monetary,” Recto said.

“I hope that the government will walk the talk,” Allan Suarez of the Export Development Council (EDC) said, adding that if the ERP is implemented as planned, the economy would be spared the worst.

Charles Sy of the Cebu Contractors Association said the government should revisit some of the infrastructure projects in the pipeline to find out which ones are “unnecessary.”

“Or maybe they are necessary but not urgent…like some flyovers,” he said in an interview after the economic briefing.

He said the government can do without some flyovers, which cost about P200 million each to build, if it implements proper zoning. “The money (saved) can be used to provide skills to the jobless…which is more urgent because they no longer have anything to eat,” he added.

To speed up the implementation of infrastructure projects, Andaya said the Department of Budget Management has decentralized fund disbursements.

“Funds will be disbursed from my office straight to the implementing agency,” Andaya said. At the same time, he said his office will monitor government procurement staff and officers of their adherence to procurement laws.

Procurement timelines have also been cut down from 80 to 20 calendar days.

To further speed up public infrastructure spending, Andaya said the DBM will take back unused project funds that have quarterly or semi-annual deadlines. Andaya referred to the reform as the “use it or lose it” policy.

Under the ERP, Andaya said agencies like the Department of Public Work and Highways, Department of Transportation and Communication, Department of Environment and Natural Resources and the Department of Agriculture (DA) have already committed to spend 60 percent of the total P100.7-billion within the first six months of the year.

Under the implementation of the ERP, the National Government also plans to:

l Generate 824,555 jobs through the Comprehensive Livelihood and Emergency Employment Program;

l Implement capacity-building programs geared toward market diversification and product positioning for the export sector. The ERP will also provide for a P1-billion support fund for exporters across all sectors nationwide.

l The DA will continue to focus on achieving rice sufficiency not only for food security but also to generate more jobs through infrastructure development, education and other assistance.

Teves, on the other hand, stressed the need to increase revenue collection through the Bureau of Internal Revenue and the Bureau of Customs (BOC).

To increase revenues, the Department of Finance has proposed, among others, increasing sin taxes and rationalizing fiscal incentives.

Last night, Teves was expected to meet with BOC Cebu officials and export groups to discuss possible measures to help exporters cope with the crisis.

Among the concerns that Cebu exporters raised to the economic team is the customs regulation requiring imported goods in bonded warehouses to be liquidated. Exporters that do not have orders to fill due to the crisis have lowered their production, hence their use of imported raw materials. (with LAP)