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July 18, 2008
Civil society to government: “Shelter the people from a “perfect economic storm”
Members of the Alternative Budget Initiative (ABI), the consortium of fifty nongovernment organizations which pioneered civil society engagement in the Philippine national budget process, called on President Gloria Macapagal-Arroyo to “shelter the people from a perfect economic storm.” Leonor Briones, lead convenor of Social Watch Philippines which is the organization that initiated the ABI, said that the country’s economic performance during the first quarter of 2008 and the macroeconomic trends depict that the nation is heading towards the perfect economic storm. “Inflation continues to accelerate after the first quarter, hitting a record 11.4 in June. The diminishing purchasing power of people’s money caused by the surging prices of rice, food items and oil will cause lower consumption and affect business profitability. The oil prices, which, for the month of June alone, already had four rounds of increases in gasoline and diesel to a total of P6 per liter will also increase costs of farm inputs.” Briones said. ABI members also called to the fact that the lower growth in industry sectors should cause alarm. Data from the National Statistics Coordinating Board (NSCB) showed that the first quarter of 2008 saw the GDP growing by 5.2 percent, which is quite pitiful when compared to the seven percent growth recorded during first quarter of the previous year and 7.4 percent growth during the last quarter of 2007. The industry sector posted the most significant slowdown from 6.6 percent growth in 2007 to 3.9 percent in 2008. This is caused by the downtrend in manufacturing and construction which are the main drivers of job generation. The growth of the construction industry slowed down from 21.7 during the first quarter of 2007 to 4.5 in the first quarter of 2008. The ABI group also said that the President’s budget call for the 2009 budget is calling for the perfect economic storm because of the unrealistic assumptions on the budget proposal for 2009: the targeted GDP real growth for 2008 and 2009 and 2010 is incredible; the inflation rates are too low for the three years; and the exchange rate is estimated at 40-43 while the current exchange rate is much higher. With these trends, the ABI which succeeded in proposing alternative budgets that ensured more allocations for social development for the 2007 and 2008 budgets through engagement in Congress and Senate, called on the President to prioritize social services in government allocations to protect the people from the perfect economic storm. # |