RP need not copy other countries' stimulus plans, says MAP executive

MANILA, Philippines - The Philippines need not copy the economic stimulus packages of other countries in order to deal with the global financial crisis as the country has not been as badly hit, the Management Association of the Philippines (MAP) said.

“The Philippines does not have a subprime crisis. Banks are not in the brink of collapse and companies are not in need of rescue,” MAP president Joey A. Bermudez said.

Instead, Bermudez said the country must loosen the investment climate in industries such as mining to attract the inflow of more investments. 

For his part, Emilio T. Antonio Jr., president of the Center for Research and Communication Foundation, said the reason why the country is experiencing a slowdown in growth and overseas sales is not the globally economic crunch, but the lack of competitiveness that has plagued the different industries for years.

“The roots of the obstacles to growth are less directly linked to the global crisis,” he said.

Antonio said the Philippines has been having a hard time due to 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. He said this is indicated by the slow growth of the country’s export revenues compared with its neighbors. 

He said the low export revenues could be due to the decline in peso price of exports which resulted in lower profit margin of exports, and, the drop in the peso price not only of the dollar but of the other foreign currencies as well.

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

Antonio said that despite the availability and lower cost of funds, private investment expenditure is still sluggish. Likewise, improvements in the nation’s financial health, foreign loans and investments still come in trickles.

However, Antonio emphasized the Philippine economy is in a better financial position to face the global financial slowdown than at other crises in the past.