Government can't relax in face of recession - Noli

MANILA, Philippines - Vice President Noli De Castro said the government cannot afford to be complacent in the face of a possible recession as reported by the National Statistics and Coordination Board (NSCB).

Speaking at the Business Summit at the Asian Institute of Management (AIM), De Castro said the reported recession only confirms the need for the country to be vigilant because the economic environment remains volatile.

 “Our government is not taking any chance. We cannot afford to become complacent. We have to aim for the best,” De Castro said, adding that the government is implementing the economic resiliency plan or ERP to address the impact of the global crisis.

“The ERP will have a funding support of P330 billion and will seek to ensure sustainable economic growth, save and create as many jobs as possible, protect the most vulnerable sectors, and promote low and stable prices of commodities,” he added.

In the housing sector, De Castro said the Pag-IBIG Fund has set aside more than P80 billion for housing loans of its members.

He said the administration has also issued an executive order encouraging all government agencies to allocate at least 1.5 percent of their maintenance and other operating expenses (MOOE) for emergency employment. “Priority will be given to those displaced by the crisis,” he said.

Globally, De Castro said countries are hopeful that the financial storm is weakening and that recovery will begin next year.

Despite the reported recession, De Castro sees a ‘rosy’ economy for the country. He said the present local economy can be best described by an acronym which he coined as ROSE – resilience, opportunity, strength, and employment.

The country, he said, demonstrated ‘resilience’ last year when during the height of the negative reports of banks closing down in the US and elsewhere, local gross domestic product continued to grow at a respectable 4.6 percent.

This year, De Castro said, the country still has ‘opportunities’ for growth, particularly in housing, trade, intermediate industries, tourism, and other IT-enable services.

He noted that the country’s fiscal sector remains strong while the macroeconomic fundamentals are stable adding that the inflation rate is slowing which will eventually boost personal consumption spending. 

De Castro said employment was not bad in the Philippines compared to the of United States last year. In 2008, he said the government created 530,000 jobs while America lost 3.6 million jobs while China lost 20 million.   

“Today, worker lay-offs due to the crisis, dropped sharply from around ten to 14,000  workers per month since November last year to only about 1,000 workers in April 2009,” he said. 

De Castro urged the business sector to get their act together so that local enterprises can capture the gains of the global market. “The only way for us to take advantage of the opportunities during a recovery is for our economy to become competitive and innovative and it is in the small and medium enterprises sector that this is most evident,” he said.