Lack of competitiveness, not global crisis hindering RP growth - economist

MANILA, Philippines – The slowdown in the country’s growth and overseas sales is not directly related to the global economic crunch but rather the lack of competitiveness that has plagued the different industries for years, a top economist said.

“The roots of the obstacles to growth are less directly linked to the global crisis,” Emilio T. Antonio Jr, president of the Center for Research and Communication Foundation, said in a presentation.

He said the Philippines has deep-seated problems that require strategic responses. In fact, he said these things should be addressed with or without the crisis.

These problems, he said, are the erosion of competitiveness, lack of investor confidence, both foreign and local, and weak employment generation.

Antonio stressed that the lack of global demand is not likely to be the problem of slow exports. Therefore, he said there is no need to stimulate demand.

He said this is indicated by the slow growth of the country’s export revenues compared with its neighbors.

The low export revenues, he pointed out, could be attributed to the decline in peso price of exports which resulted in lower profit margin of exports as well as the drop in the peso prices not only of the dollar but of the other foreign currencies.

“Competitiveness in the export sector is key. Lack of confidence is holding back growth,” he added.

Antonio said despite the availability and lower cost of funds, private investment expenditures are still sluggish. Likewise, while there have been improvements in the nation’s financial health, foreign loans and investments still come in trickles.

Despite this, Antonio said the Philippine economy is in a better financial position to face the global financial slowdown compared to the other crises the country faced before.