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Phillipines in Fiscal Crisis, May Face Economic Collapse

Discussion in 'Band of Glockers' started by v1ct0r, Aug 24, 2004.

  1. v1ct0r


    Sep 29, 2003
    President Gloria Macapagal Arroyo said Monday that she is studying the feasibility of declaring a state of economic crisis to ease pressure on public finances.

    'We are already in the midst of a fiscal crisis, and we have to face it squarely,' she said. 'We are hoping to work this out with public support and openness to sacrifice. The pain is imminent, but it will be shared fairly.'

    The Philippines has accumulated a national debt of nearly 80 percent of gross domestic product – close to $60 billion or 3.36 trillion pesos – but Monday’s statement from Arroyo marked the first time the president has referred to the country's impending economic situation as a “crisis.”

    Arroyo’s comments stemmed from a report made public by economists at the University of the Philippines, who said the country would face an Argentinian-style economic crisis in two to three years unless a widening public sector deficit and ballooning debt problem were brought under control.

    'The growing dependence on debt means that any sudden increase in global interest rates, which can no longer be ruled out, would cause huge difficulties in repayment, whether or not the government defaulted formally,' the report said. 'This would result in a sharp cutback in subsequent credit, particularly from foreign lenders, and precipitate a crisis such as that Argentina or Turkey experienced.'

    The report warned that a spike in global interest rates could make it extremely difficult for the government to meet repayments on its foreign borrowings, precipitating a possible debt default within two to three years. According to the economists, public debt in the Philippines has more than doubled since the mid-1997 Asian crisis and interest payments account for a third of the government's spending.

    Monday's report was authored by the budget and economic planning ministers of Arroyo's predecessor, Joseph Estrada, and the economic planning ministers of former Presidents Corazon Aquino and Ferdinand Marcos.

    The economists also criticized some of the country’s politicians for pandering to the public's ignorance. They pointed to the deficit’s progression alongside economic growth, suggesting there are structural flaws within the country’s government, such as corruption, and weak tax collection practices. Nonetheless, Arroyo wants the economic planning chief Romulo Neri, Finance Secretary Juanita Amatong, Budget Secretary Emilia Boncodin and Trade Secretary Cesar Purisima to remain in the cabinet, her spokesman Ignacio Bunye said. Arroyo is expected to make further changes to her economic team.

    Arroyo, who secured a new term in the country’s general elections last May, has attempted to work with Congress on 'strategies to get the budget in place' by proposing five crucial tax measures in her State of the Nation Address last month. Yet she has been met with staunch opposition from these same legislators who have spurned suggestions of raising taxes. No members of Congress have sponsored Arroyo’s legislation which would generate 80 billion pesos more in annual revenue.

    In the interim, Arroyo renewed her call for the country to make sacrifices, saying the pain while “imminent” would be fairly shared. In the interim, the president urged her public to be resourceful, courageous and demonstrate solidarity as a nation.

    “Average Filipinos are already taking the brunt of sacrifices but we have to gather round again as one national community to take stock of the future,' she said.

    Arroyo hopes to contain this year's national budget deficit at 197.8 billion pesos (3.54 billion dollars), with promises of wiping out the debt completely before her term ends on 2010. The deficit in the first half of this year reached 80.1 billion pesos, exceeding a government-set ceiling of 79.6 billion pesos. Ironically, Arroyo's budget plans call for the country to keep spending more than it collects for at least four more years.

    The dollar rose to 55.855 pesos on Monday from its close on Friday of 55.650 pesos, while the 30-company Philippine Stock Exchange composite index fell 6.66 points, or 0.4 percent, to close at 1,576.18.

    Joi C. Ridley

  2. jecht_sphere


    Aug 12, 2004
    Quezon City
    this is true folks. our budget deficit is getting deeper. the culprit of course is "debt services" (mga utang natin). FYI, 55-60% of the national expenditure goes to debt services repayment (this is an automatic appropriations) and the rest goes to Sectoral allocations (social, economic, general public and defense services.

    Imagine, 40-45% lang ang operational fund ng government, lahat pambayad sa utang. What is worse, kukurakutin pa ang oerational fund so approximately, 30-35% na lang goes to real,good,untainted services

    d result of course FISCAL CRISIS.


    1. ASAP stop na pangungutang,(except for flagship projects)
    2. apply stringent measures on revenue collection (hoy gising! BIR, Customs, other revenue collecting agencies. maawa nmna kayo sa bansa natin)
    3. barilin na lang siguro ng GLOCK sa luneta yung mga kurakot!;z ;z ;z I would gladly volunter as one of the member of the firing squad. How about U?

  3. mc_oliver


    Feb 21, 2002
    Buksan na uli ng PNP yung PTC applications. Extra income din yan. ;)
  4. casmot

    casmot Re membered

    Meron naman PTC, taga lang ang presyo!;f
  5. mc_oliver


    Feb 21, 2002
    Yeah, that, and kelangan i-survive mo muna attempt sa buhay mo. ;f
  6. PMMA97

    PMMA97 TagaBundok

    Nov 25, 2003
    Balatan dapat ng buhay lahat ng grabe mangurakot! Buti na lang madaming OFW kung wala sila gyera na siguro dyan sa bayan kong Pilipinas!
  7. Alexii

    Alexii Janeway Forever

    Nov 14, 2001
    Delta Quadrant
    You are EXTREMELY correct there! The remittances of OFWs keep this country afloat for many years. Without them, the Philippine economy would've hit dirt a long time ago.
  8. PMMA97

    PMMA97 TagaBundok

    Nov 25, 2003
    Cops brace for violence in light of crisis

    Updated 06:53am (Mla time) Aug 27, 2004
    By Christian Esguerra
    Inquirer News Service

    PHILIPPINE National Police Director General Edgardo Aglipay said the PNP has prepared an elaborate security plan in anticipation of possible criminal violence and street unrest arising from the country's worsening financial crisis.
    "Whatever the administration decides on, we will support it to the fullest," said Aglipay at a press conference yesterday.

    President Gloria Macapagal-Arroyo admitted on Monday that the country was now "in the midst of a fiscal crisis" because it was experiencing difficulty in financing its expenditures and managing its debt, and sought to rally public support for the government's tax reform and cost-cutting measures to address the crisis.

    Some sectors feared the Philippine situation was approaching the experience of Argentina whose economy collapsed in 2001, triggering an outbreak of street violence that resulted in the death of 25 people.

    Aglipay said the PNP has several crowd-dispersal units, experienced in dealing with mass actions like
    those that occurred during the Estrada and Davide impeachment cases and the May 10 elections.

    The PNP chief has classified the country into "residential" and "common" zones, to ease the pressure on the 115,000-strong PNP in providing nationwide security.

    The PNP chief said he was leaving it up to community leaders organized by local police to secure the residential zones-villages, squatters areas and barangays.

    "We will just visit them and ask them what their problems are and we will help them solve it. If they cannot do it, we will assign policemen in the area or include (the area) in our patrol coverage," he said.

    By identifying residential zones, Aglipay said the PNP could provide ample 24-hour security in the common areas-shopping malls, schools, churches, public markets and other densely populated areas.

    Aglipay said he wants to increase police visibility so that a citizen would feel safe from the moment he leaves home in the morning, attends school, Mass or goes to a nightspot, and returns in the evening.
  9. Problema talaga natin ang gobyerno. Kahit siguro si Mother Teresa ilagay sa poder, mangungurakot din, e. Kultura na kasi.

    I know this idea is wild, but what if we could "outsource" government, and let those who have had better results take a turn in managing our affairs, say for 50 years. For example, what if we allow Luzon to be managed by Taiwan, the Visayas by Singapore, Mindanao by Malaysia. What would they do to turn our economy around? I suppose they would not do any worse than what has been done by local executives so far.

  10. bulm540


    Jun 18, 2004
    IF our economy collapses it would have a profound effect in at least the SEA.
  11. mikey177

    mikey177 Remember

    Jan 28, 2003
    Aside from patently CYA measures like stocking up on ammunition, food and other supplies, what productive actions can we ordinary citizens take to help prevent our country from hitting bottom?
  12. PMMA97

    PMMA97 TagaBundok

    Nov 25, 2003
    As for me I increased remittance of my US dollar based salary to 80% para makatulong ng konti sa economy. I also encourage OFWs not to wait for exchange rates to go higher before sending remittances. Minsan kasi naghhihintay pa ang mga pinoy na tumaas ng husto ang exchange rates ng USD to Peso before they remit.
  13. jecht_sphere


    Aug 12, 2004
    Quezon City
    We should encourage more spending despite the expected inflation rate increase while on fiscal crisis. we should not be discouraged to spend despite the increasing prices of goods because this will only worsen our economy. More money inflow, from the private sectors should come out and circulate in the economy. lets reduce our savings deposits as much as possible. in this way we are helping the national government to booster the economy without additional costs. its like pumping up a new blood stream from the heart to circulate in the body.

    Moreover, dapat ilabas nyo na mga dollars nyo na tinatago regardless of forex rate. PMMA97 is correct on this. do not speculate on forex. the government needs your dollars to boost up its dollar reserves para tumaas ang value ng Peso. More importantly, PLEASE, PLEASE always have your dollars exchange with the banks and other legal financial institutions, NOT with the BLACK MARKET, though the latter gives higher xchange rate. You are not helping the economy this way because the dollars you've xchange will not circulate in the economy because the black market will just hoard it for a higher yield in the future as the peso devalues further.

    Imaginin mo na lang my fellow filipinos, yung kikitain mo sa black market eh, kakainin lang ng increase sa prices ng commodities so wala din. but if u do otherwise, sa una lang tataas presyo but later on, it will become steady and down again if ever the economy catches up. lets think for "long term" effect. Para din sa atin ito.

    lets help our country. in this way we our helping ourselves to survive in the mist of economic crisis. Huwag muna tayo magkanya-kanya.