NEDA sees no reasons to be alarmed with US crisis, downplays critics PDF Print E-mail
Monday, 22 August 2011 13:12


The National Economic and Development Authority (NEDA) sees no enough reason to be alarmed despite the prevailing economic crisis in Western countries, particularly the United States.

NEDA Assistant Director General Ruperto Majuca reiterated the government’s stand amidst continuous speculations that the US’ downgrade and economic crisis will greatly affect the local economy.

“With regards to the impact to the Philippine economy of the US credit rating downgrade , NEDA estimates that it will be minimal, around .11% of the GDP (gross domestic products). And that is too small,” he said in Filipino during the Communication and News Exchange (CNEX) forum at the Philippine Information Agency.
However, Majuca said that the government must do necessary measures “to calm the market so that the indirect effects will not happen”, also referring to future effects of the crisis.

Lower exports in trade channels, slower flows in remittance channel as well as in foreign direct investments are among the most likely effects of the US credit downgrade to the Philippines. But he noted that the people should not be alarmed with these.

“Our people should not be alarmed because this (US crisis) has only small effects. The (US) economy has already experienced the slow down before, and there we’re just additional points on the slow down today. So, it would just possibly hit through the trade channel and the remittance channel,” Majuca said during the media briefing.

On the other hand, ADG Majuca downplayed critics particularly those comparing the 2011 economy from the previous years.
Reacting on recent reports that the first three months of 2011 have shown lower outputs than the same time in 2010, Majuca claimed that it is not right to compare the statistics of both years.

“You cannot compare Q1 of 2011 with Q1 of 2010 because it’s like comparing apples and oranges. There were election spendings in Q1 of 2010 and a fast track recovery from a very low base (in 2009), and that’s higher. There was also the implementation of the Economic Resiliency Plan, which was the fiscal stimulus to counter the 2008-2009 (US) recession. Then, the quarter one of 2011 was buffeted by so many shocks – oil price crisis and others. So, you cannot compare both,” he explained.

Among other economic issues, which confronted the Philippine economy this year included the slowdown of the economies of US and other European countries, political turmoil in the Middle East countries, and supply-chain destruction brought by disasters in countries like Japan.

However, Majuca emphasized that despite of all the recent events affecting the local market, the economy showed remarkable resiliency.
“The 2011 1st quarter was buffeted by so many shocks… but despite of all these things, with the many shocks, the economy shows remarkable resiliency…. We can expect brighter numbers, rosier numbers for Q3 and Q4,” he ended.