Upbeat economic sentiment in Portugal

Lisbon, Portugal – After suffering its worst recession since the 1970s, Portugal seems to be looking at better economic prospects with an expected growth of 1.2 percent this year and employment figures showing some improvement. The financial crisis in 2008 further weakened the country’s economy, worsened by the discovery that two of their biggest banks have been playing with the numbers and that they have actually been losing over the years due to bad investments. As a matter of fact, Portugal headed the list of countries tagged as the “PIGS economies” – Portugal, Ireland, Greece and Spain – because it was in deep financial trouble almost to the point of bankruptcy. It didn’t help either that the government has been overspending, compounded by an over-bureaucratized civil service.

In 2010, Portugal obtained a €78-billion bailout package to stabilize its finances and embarked on austerity measures plus a series of tax increases and salary cuts for government employees. The Portuguese government headed by President Anibal Silva is optimistic that the country will be exiting the bailout program this May, although there is brewing dissent even among Cabinet members on the kind of strategy that should be adopted.

In any case, things seem to be looking up especially with German Chancellor Angela Merkel’s expressed support for any decision the government will take regarding the exit. As some observers noted, it’s much better for Portugal to be talking about an exit rather than going into another bailout program. For sure, it will not be a walk in the park since it has to meet a budget deficit of four percent GDP for 2014 and 2.5 percent in 2015.

The upbeat sentiment, however, is clearly felt in the capital city of Lisbon, especially with the latest report from the UK-based PricewaterhouseCoopers that by 2015, the city is set to have the biggest increase in hotel occupancy compared to other European cities. Some 10 new world class hotels are expected to be opened this year, and according to the PWC report, Lisbon is right behind Edinburgh and Milan in the list of cities that show a marked growth in hotel occupancy rates this 2014.

According to the Lisbon Tourism Board, the capital city recorded an unprecedented 10 million nights in terms of hotel occupancy figures in 2013, bringing total tourism revenues to €587 million or an increase of 8.5 percent from 2012. Last year proved to be a good one for tourism with the Lisbon airport recording over 16 million passengers, as well as cruise liner passenger records passing through the Port of Lisbon that showed a seven percent increase for a total of 558,000 passengers.

No doubt tourism is a significant contributor to Portugal’s economy with President Silva emphasizing its importance for exports and job creation since tourism represents nine percent of the GDP. Obviously, a new investor visa scheme called the “golden visa” program that was started in 2012 has been a good strategy, with a lot of Chinese taking advantage of it. According to figures, Chinese nationals were the recipients of 433 out of the total 542 golden visas that have been issued so far, with the Russians coming in a far second at 23 while Brazilians and Angolans accounted for 28.

The golden visa program offers residency permits to the immediate family members of foreigners who will invest a million euros or could generate employment for at least 30 people. Those who purchase €500,000 worth of real estate also qualify in the program which is expected to attract over €500 million in investments this year. For sure, the Portuguese have found a goose that lays golden eggs.

Spanish Foreign Minister Margallo visits Manila

The three-day visit of Spanish Foreign Minister Jose Manuel Garcia Margallo definitely affirms the close bilateral ties between the Philippines and Madre España. Minister Margallo is accompanied by an official delegation of 15 members plus a business group consisting of some 20 executives/CEOs from several sectors that include IT, infrastructure, energy, water, engineering and defense. Spanish Ambassador Jorge Domecq said there has been an increased interest from Spanish firms that are bullish about investments in the country, although he admitted that the restrictive economic provisions in the 1987 Constitution continue to be an area of concern.

Minister Margallo will be discussing cultural, political, and economic issues as well as other topics of “mutual interest,” among them the upcoming 2015 Asian integration and relations between the Philippines and the European Union with Spain having been a main “interlocutor,” according to Ambassador Domecq. Several agreements between the Philippines and Spain are expected to be signed during the visit such as a cooperation program in combatting transnational crimes.

The Spanish Foreign Minister will be flying to Tacloban today to meet with Mayor Alfred Romualdez and turnover boats to help fishermen whose livelihoods were disrupted by Typhoon Yolanda in 2013. As far as we know, Spain is the only country from the European Union that has a permanent team extending humanitarian help for Typhoon Yolanda victims.

Minister Margallo will also visit Clark for the inauguration of a warehouse that will be used to store water treatment plants, generators, communications systems, rubber boats, tool kits and other materials that could help strengthen the Office of Civil Defense and the NDRRMC’s disaster preparedness and response capabilities. The warehouse in Clark is the first of the six “three-in-one” facilities that will be opened to facilitate disaster risk reduction efforts in the Philippines.

***

Email: [email protected]