Economic slowdown due to external factors

BACOLOD CITY — The current economic slowdown facing the Philippines may be blamed on external forces and structural problems, according to the chief economist of the Bankers Association of the Philippines.

"The problems are structural. I don’t think one president will solve them. It will take two to three presidential terms to solve our problems," economist Johnny Noe Ravalo said in a interview Friday.

Ravalo said it was not correct to conclude that the local financial markets have reacted negatively to President Arroyo’s recent State of the Nation Address (SONA).

"On the day of the SONA, a lot was happening in the world, including the impeachment of Indonesian President Abdurrahman Wahid," he said. "In the international financial market, Argentina and Brazil were on the verge of loan defaults."

A day after the SONA, local share prices closed lower while the peso dropped to 53.40 to the dollar from 53.15 in previous trading.

"It is not correct to say that the market disregarded the policies of President Arroyo. There were simply bigger issues other than the SONA," said Ravalo, who was here for the induction of the officers of the Bankers Club of Bacolod.

He pointed out that the Philippines is also experiencing a "paradigm shift."

"There is too much being made of the fact that we are replacing an actor with an economist," Ravalo said.

He said a person’s qualification was not an issue and should not be a gauge for performance," he said.

Ravalo said Estrada, a former movie actor, was able to govern in part because of the low expectations of the Filipino people.

"On the other hand, the public is expecting much from President Arroyo, who is an economist," he said. "But not all economists make good presidents."

For the country to survive the crisis, it should have a clear and objective view of where the real problems lie because most of them are structurally-rooted, Ravalo explained.