External factors blamed for slump

President Arroyo blamed yesterday external factors for the continued skittishness of local financial markets a day after her first State of the Nation Address (SONA).

"Our problem really is we have external factors like this worldwide economic slowdown. The Dow Jones even went down today," the President said.

The Dow Jones stock index dropped 183.30 points yesterday to 10,241.12 on bad corporate income reports and after US Federal Reserve Chairman Alan Greenspan said the Fed may reduce rates anew if the US economic slowdown continues.

Local traders said the downtick in American financial markets pulled down the Philippine Stock Exchange, with the blue-chip PSE stock index falling by 3.01 points to 1,366.01. The All-Shares index, however, went up 4.2 points to 798.10.

The peso also continued to slide and closed at 53.60 to the dollar at the Philippine Dealing System yesterday as traders continued to hold on to their greenbacks in anticipation of a further drop.

The President, who flew to Baguio City yesterday to distribute relief assistance to the victims of Typhoon Feria, said she was not worried over foreign investments moving to Indonesia following the succession of Megawati Sukarnoputri to the presidency.

Mrs. Arroyo said the funds moving to Indonesia are basically portfolio investments, or the so-called "hot money," which are short-term and flighty by nature anyway.

The President made the explanation after opposition leaders and other critics continued to clobber her for a supposedly "incredible" State of the Nation Address where she promised "jobs, housing, education and food on every table."

Mrs. Arroyo began her speech by recounting how three young boys from the Payatas dump in Quezon City wrote their wish lists and folded them into a paper boat which they floated on the Pasig River in the hope it would reach Malacañang.

Senate Minority Leader Edgardo Angara blasted the President’s literary license and related a "parable of the paper boat" where he depicted the Arroyo administration as "sinkable and without direction."

"It is not credible," Angara said. "Even as a figure of speech, it should at least have a ring of truth."

Mrs. Arroyo also insisted the story was true but clarified that she did not actually see the paper boat.

"They really wrote the letter and it’s true that they made a paper boat. They floated it on the Pasig in hopes it would reach Malacañang but it did not reach us. I just read about it in the papers," she said in a television interview on Monday night.

A militant church group challenged Mrs. Arroyo to use her skills as an economist to truly address poverty in the country.

"For sure, Arroyo could easily provide jobs, housing, education and food for the families of Jason, Jomar and Erwin (the three boys) to prove she does fulfill promises," said activist Robert de Castro of the Promotion of Church People’s Response (PCPR).

"But when the demands of the rest of poor Filipinos for legislated wage increase, price control and other immediate economic relief are ignored, the reasons to protest Arroyo’s anti-poor regime will surely multiply every day," De Castro added. — Artemio Dumlao, Aurora Alambra, Sandy Araneta, Mayen Jaymalin, Sheila Crisostomo