Asean seen calling emergency meet

BY JOCELYN MONTEMAYOR

BUDGET Secretary Rolando Andaya Jr. yesterday said economic managers of member countries of the Association of Southeast Asian Nations may call an emergency meeting if the US Congress fails to pass the $700 billion bailout plan proposed by President George W. Bush.

But Andaya, in a radio interview, said economic managers believe that the bailout plan would eventually be approved.

The US Congress will meet again Thursday (Manila time) to come up with some revisions to the bailout proposal where the US government would use the $700 billion to buy toxic assets of beleaguered banks.

Andaya appealed to the public not to panic. He said he is confident the existing economic policies would help cushion the impact a possible rejection of the bailout plan will have.

He cited the stable banking system, a high savings rate and remittances from overseas Filipino workers.

Trade Secretary Peter Favila said the economic managers had drawn up measures to support the economy during a meeting Tuesday night. But Favila said the economic managers would rather keep the details to themselves until they have informed President Arroyo.

Favila assured the public that what they are "prepared to put in place is meant to shield the Philippine economy from further external shocks," referring to a possible rejection of the US bailout.

Planning Secretary Ralph Recto warned that a recession in the US would slow down the Philippines’ growth especially in exports, and possibly widen the fiscal deficit next year.

"We expect growth to slow down this year, possibly to about 5 percent and more or less we have the same growth next year as well," he said, adding that an early passage of the 2009 budget would enable the government to spend more, especially on infrastructure, which would help the economy.

President Arroyo, in opening the MassKara festival in Bacolod City, warned against complacency despite recent economic gains and stabilization of prices of food and fuel in the world market.

She said the government continues to monitor the global situation as she acknowledged that "there are hard times again" that the government must face to avert the effects of a global economic slowdown.

Senate majority leader Francis Pangilinan said government should rid itself of corruption to be able to survive the economic turbulence brought about by the US financial crisis.

"The world is changing so rapidly around us that we must look for capable public sector leaders who are adept at change and reforms, who think outside the box and represent a new way of thinking and acting to ensure the survival of our nation," he said.

"We must plug the leaks that prevent the Bureau of Internal Revenue and the Bureau of Customs from collecting over P100 billion annually due to inefficiency and corruption," he said.

Party list Rep. Teddy Casiño (Bayan Muna) renewed his call for Congress to "radically" revise the P1.145 trillion proposed budget for 2009 following the decision of economic managers to downgrade the growth forecast this year as a result of the financial crisis in the United States.

The revised economic growth projection is 4.4 to 4.9 percent, from the 5.5 percent to 6.4 percent assumption of the Development Budget Coordination Committee three months ago.

From an initial projection of 6.1 percent to 6.9 percent, the GDP in 2009 may grow by only 4.1 percent to 5.1 percent, Casiño said.

Casiño also noted that the latest revised ADB projection for the 2009 GDP growth, released September 16, was down to only 4.7 percent.

"Sticking to the P1.4 trillion national budget will most likely bloat the budget deficit which is already projected at P40 billion. Government will then be forced to borrow more money, which would be very expensive given the global credit crunch," he said.

Casino said in view of these economic realities, "the logical step would be to reduce the proposed 2009 budget and realign items like debt servicing, military expenditures, intelligence funds and vague lump sum allocations to economic and social services as well as infrastructure." – With Dennis Gadil and Wendell Vigilia