ASEAN KEY DESTINATIONS
Aquino regime slows growth
Less opimistic than most assessments tracking the slump of Philippine economic growth since President Aquino took office in July last year, Credit Suisse, the Swiss financial services firm, has downgraded its full-year economic forecast for the country from 4.6 percent to 4.3 percent.
Credit Suisse reported that based on a new research of Asian markets, it expected growth in the region to “slow down more sharply than most” in the coming months. It also scaled down its Philippine growth forecast for 2011 to 4.2 percent from 5 percent. It said the downward adjustment was less optimistic about the country’s growth compared with others’ analyses.
“This was partly because we didn’t think that the planned PPP (public-private partnership) infrastructure projects that many were bullish about were likely to get off the ground in a hurry,” Credit Suisse said.
This is a critique directed at the administration’s underspending on infrastructure. The PPP is the administration’s anchor for its economic growth strategy.
Credit Suisse added that the adjustment for its 2010 forecast was larger as it assumed that the “less optimistic global growth scenario” would dampen remittances from overseas Filipino workers (OFWs) and export growth.
It also said Manila “might undershoot” its full-year fiscal deficit program of P300 billion because of slow spending. It said underspending might have dragged down second quarter gross domestic product (GDP) growth, which was below expectations at 3.4 percent.
The forecast came in the midst of a review of the government’s growth targets by economic managers following reports that the economy expanded just 3.4 per percent year-on-year in the second quarter—well below the government’s target of 4.5-5.5 percent, placing the Philippines in the category of one of the weakest performers in Asia.
The slump took place in a year of a profuse proliferation of moralistic sloganeering on honest governance as the key to expanding economic growth, as well as reducing poverty.
By contrast to economic growth, the main output of the Aquino administration consisted of a Herculean campaign to dig up skeletons of corrupt transactions during the previous administration that consumed most of its energy at the expense of neglecting economy-boosting measure
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