RP economy headed for slump, says former national treasurer akingnews/view/ /RP- economy-headed-for-slump-says- former-national-treasurer

The Philippine economy could be headed for a slump after the new administration assumes office in July. Former national treasurer Leonor Briones, lead convener of Social Watch Philippines, made the forecast in a presentation on the national situation during the 9th UCCP Quadrennial General Assembly in Dumaguete City Thursday. Social Watch is a non-government organization monitoring government programs relative to the implementation of Millennium Development Goals (MDG) targets in terms of achievements, trends and shortfalls. Briones said the new administration would be facing an economic slump because the budget for the year has already been depleted.

“The biggest item in the budget is infrastructure and all the infrastructure projects for the entire year have already been bidded out,” Briones said. She said the positive predictions of economic growth for 2010 were premised on successful elections, whose results have been welcomed by international and local business communities.

economic growth did not result in poverty reduction Briones said that the Philippine experience also showed that economic growth did not result in poverty reduction because there were more poor people now than there were 10 years ago. She presented government figures showing: the country’s 20 poorest provinces were mostly in the Visayas and Mindanao while the country’s richest provinces were in Luzon. Underemployment has been on the rise, according to National Statistics Office records showing that in January 2010, underemployment rose to 19.7 percent from 18.2 percent for January 2009.

However, unemployment improved slightly this year, decreasing by.4 percent from the 7.7 percent in January last year. “When the government says that the economy is growing, you have to ask where the growth is coming from, who is benefiting from the growth,” she said. services sector agriculture The government figures showed that from 2007 to 2009, the services sector registered the biggest growth at 3.3 percent in 2007 and 3.1 percent in 2008 while agriculture, which enjoyed a 3.1 percent growth in 2007, slumped to 0.1 percent in 2008.

industry On the other hand, industry, which had the highest growth rate of 4.2 percent in 2007, registered a negative two percent growth in deficit spending Briones also noted that deficit spending increased from P12.4 billion in 2007 to 67.1 billion in 2008, jumping to billion in poor revenue collection The situation was worsened by the government’s poor revenue collection, she said. The figures for 2009 showed a total of P115.9 billion in uncollected revenues from tax and non-tax sources.

recovery and reconstruction Briones said the Philippines would have to spend P207.8 billion for recovery and reconstruction in the next three years. “The challenge for the elected officials would be if they are willing to spend a big part of the budget for education, health and agriculture.” She called on the government to lessen the debt burden by improving revenue generation, plugging leakages in tax administration and cutting of wastage from corruption and frivolous spending of discretionary funds.

"This year, we are spending 5-10 billion to give money to the poor but that is not the solution; the solution is to give the poor people jobs. Relevant education and healthy population is the key to addressing poverty,” Briones said.