‘Cooperate, link with rest of Asia’

Thursday, April 30, 2009

By Nancy R. Cudis

A GOVERNMENT research institution engaged in independent and non-partisan research recommended that the Philippines cooperate and coordinate with other East Asian countries to accelerate intraregional trade and investment to cope with the global financial crisis.

The Philippine Institute for Development Studies (PIDS) pointed out that these investments will not only create job opportunities in the region but also boost the growth potential of promising industries, like business process outsourcing and tourism.

Speeding up intraregional trade and investment will encourage the Philippines to reduce its dependency on the US, especially in terms of export, and to increase reliance on neighboring countries.

In yesterday’s forum on non-tariff measures, global financial crisis and the Philippine outlook for 2009 organized by PIDS and the Cebu Chamber of Commerce and Industry, PIDS president Dr. Josef Yap said that the country will need a stimulus plan to contribute to investor confidence and help prop up the economy amid the global economic slowdown.

The Philippine Government passed its version of a stimulus package in the form of a P330-billion economic resiliency plan—P100 billion of which is for infrastructure projects and P30 billion for social protection programs.

Focus

“Given this condition (crisis), the government should act appropriately by putting up well-structured plans and reforms, avoiding leakages to corruption, and ensuring that programs and investments employ the most people and focus in areas that are likely to be hardest hit by the slowdown,” Yap said.

He lamented that the Philippine Government has not been putting up enough investments in the country, as shown in the continuous decline in new investments’ contribution to the gross domestic product (GDP).

However, it managed to cushion itself from effects of the crisis due to stable remittances in peso terms, contained slowdown in manufacturing and the continuation of public investment programs.

Yap expressed worry, though, that the country might not be able to sustain its capacity and fiscal revenues to cushion itself if the global financial crisis continues next year, an election year.

For East Asia to weather the global financial storm as a region, PIDS also called for a coordinated stimulus package in East Asia—a package that is expected to boost consumer demand in individual countries while eliminating the perception of trade protectionism.

Yap expressed hopes that part of China’s CNY4 trillion-fiscal stimulus package, for instance, will benefit the Philippines with China investing here.

PIDS senior research fellow Dr. Gloria Pasadilla said the country should also determine what sort of investments it wants to attract and help build.