Arroyo boasts economic feats in SONA

MANILA – The state of the Philippine economy is the best test of how the Arroyo administration has led the country in the past 8 years.

During her 9th and last State of the Nation Address (SONA), President Arroyo said even her critics should recognize her accomplishments in stirring the local economy to where it is now.

She boasted that—with her at the helm—the Philippine economy saw unprecedented average growth rate, multiple increases in investments, largest job creation in history, and lowest total debt as a ratio of the domestic economy.

“Our economy posted uninterrupted growth for 33 quarters and more than doubled its size from $76 billion to $186 billion," she said. "The average GDP growth from 2001 to the first quarter of 2009 is the highest in 43 years.”

She made special mention of the credit upgrade by ratings firm Moody’s Investor Service announced last week. She said the Moody’s rating is proof of the “resilience of our economy.”

“The story of the Philippines in 2008 is that the country weathered a succession of global crises in fuel, in food, then in finance and finally the economy in a global recession, never losing focus and with economic fundamentals intact,” she said.

Inflation, debts

She said the country saw an average inflation that is at its lowest since 1966. She cited that inflation last June dropped to as low as 1.5%.

She stressed how new tax revenues—referring to the expanded Value Added Tax Law passed in 2005—was “put in place to help pay for better healthcare, more roads, and a strong education system.”

New tax efforts will be pursued, she stressed, focusing on amendments to the Sin Tax law, which remains pending one year before she steps down as president.

“We will work to increase the tax effort through improved collections and new sin taxes to further our capacity to reduce poverty and pursue growth… Taxes should come from alcohol and tobacco, and not from books. Tax hazards to lungs and livers, do not tax minds.”

The Finance Department has been pushing for the Sin Tax amendments, among other legislative measures, to help plug the country’s widening deficit amidst the global economic slowdown.

Legacies

A key Arroyo legacy that she said she will leave for the next generation is a reduction of the country’s debts, which in the past ate up funds used for social services.

“The next generation will also benefit from our lower public debt to GDP ratio. It declined form 78% of GDP in 2000 to 55% in 2008. We cut in half the debt of government corporations from 15% to 7%. (We cut) foreign debt in half from 73% to 32%.”

She stressed, “Past administrations conjured the demon of foreign debt. We exorcised it.”

As far as infrastructure projects are concerned, she said “We have built more and better infrastructure, including those started by others but left unfinished.”

She also cited several projects that her administration initiated and delivered: Subic-Clark-Tarlac Expressway, the upgrade of domestic airports and seaports, and the building of international airports. She also boasted the Roll-off-roll-on (RORO) system, which links the archipelagic country.

“I ask Congress for a Philippine Transport Security Authority Law,” she told the legislators in the audience.

She also highlighted how the power reform law, which her administration implemented, will benefit the next generation. She explained that the intended effect of the EPIRA will not have the intended effect yet since it was designed to address the power purchase agreements made by previous administrations.

She said the EPIRA, which dismantled oligopoly, will pave the way for lower electricity prices starting next year.

She also highlighted how indigenous energy now account for 58% of total energy sources from 48%. “Nakatipid tayo sa dollars tapos na-reduce pa iyong consumption. The huge reduction in fossil fuel is the biggest proof of energy independence and environmental responsibility.”

She said the full implementation of the Renewable Energy Act and the Biofuels Act, both enacted during her term, will also benefit future generations.

Jobs, resilient industries

Job creation was another feat. An average of 1 million jobs per year, for a total of 8 million during her term—"much, much more than at any other time," she stressed.

In turn, those who describe themselves as "poor" decreased to 47% from 59%. Despite the population’s growth rate, which critics have singled out as a threat to wiping out poverty, President Arroyo said the country’s total poor was 2 million less.

She pointed out how GNP per capita—a common measure of wealth per citizen—"rose from a Third World $967 to $2,051."

She also hailed the Business Process Outsourcing (BPO) and tourism industries for being resilient amidst global economic slowdown that has hit export-dependent Asian neighbors hard.
“With earnings of $6 billion and employment of 600,000, the BPO phenomenon speaks eloquently of our competitiveness and productivity.” She then pushed for the enactment of the ICT Department.

She added that another dollar-revenue source, tourism has doubled to a $5 billion industry in the past 4 years.

Investments, remittances

She said her travels abroad and the dollars sent home by Filipinos working abroad have helped strengthen the peso and increased our reserves.

“Our vigorous international engagement has helped bring in foreign investment. Net foreign direct investments multiplied 15 times. Together with our OFWs, they more than doubled our foreign exchange reserves.”

She said these were the reasons why Moody’s upgraded the country’s credit risk. “Our credit was upgraded because our reserves grew by $3 billion while those of our peers have shrunk.”

For getting a credit upgrade at the height of a world recession, the country under her leadership "must be doing something right," President Arroyo concluded.

ABS-CBN News

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