Economy on a straight path to stalling — critics

Critics of President Aquino said the economy is headed on a straight path to disaster after the first quarter growth skidded to 4.9 percent that was almost half of the 8.4 percent expansion a year ago while Malacañang put up a brave face, saying the economy can still achieve the seven to eight percent growth target by the end of the year.

With the Aquino administration’s wrong policy direction on the country’s economic program, lawmakers yesterday said the economic slowdown plaguing the country would turn from bad to worse as the government’s policies and roadmaps have failed to build confidence among investors the administration is trying to woo in conducting business in the country.

Economists Victor Abola of the University of Asia and the Pacific and former Budget Secretary Benjamin Diokno said the slowdown in gross domestic product (GDP) in the first quarter of the year will continue at least until the second quarter.

In a text message, Zambales Rep. Ma. Milagros “Mitos” Magsaysay said the economic slowdown as manifested by the decline of the country’s GDP growth to 4.9 percent from 8.4 percent for the same period last year, was expected as the government of President Aquino failed miserably in addressing the rising cost of operations incurred by businesses due to the unabated oil price increases and instituting pump-priming activities to drum up the country’s economy.

“The economic slowdown is expected as gleaned from the dismal performance of the Aquino administration to address certain issues such as the impact of the oil crisis on operating costs, non-implementation of government infrastructure projects that would spur economic growth to attract investors as shown in the drop of the business optimism index, the slow action or inaction of government to process investment proposals and concerns besetting investors as shown in the steep drop of foreign direct investments, especially in Subic and Clark by 92 percent,” Magsaysay said.

Magsaysay issued the statement in reaction to pronouncements of leading economists claiming that the country’s economic slowdown will likely continue in the next few quarters, thus making the 7 to 8 percent growth target of the government impossible to achieve.

Magsaysay also blamed the instability of the Aquino administration due to infighting and politicking which she said does not send the right signals to investors.

“And lastly, there is the poor perception and confidence of investors as to who are at the helm of government to manage and govern the fiscal and economic policies of the government,” Magsaysay added.

House Minority Leader Edcel Lagman agreed with Magsaysay, saying that even as all economic indicators are bleak like investors’ and consumers’ confidence, GDP, inflation, unemployment, business competitiveness and the corruption index, Aquino still gloats over contrived savings and cash surpluses.

“Appropriated funds should not be immobilized in a showcase, but must be released with dispatch and utilized with reasonable alacrity to finance government operations and prime up the economy,” Lagman said.

Lagman added that forced savings are like drugs locked up in a medicine cabinet while an epidemic rages.

Even if the government will implement measures to “catch up” on its spending to boost growth and hit its target, Abola said the government may not be able to afford it. At best, he said in a telephone interview, the government may post better economic growth starting in the third quarter.

Presidential Communications Development and Strategic Planning Secretary Ramon Carandang, however, said the low GDP output certainly made it more difficult to reach their target but he said nothing is impossible for as long as the government keeps working to accomplish its economic goals.

To achieve the 7 to 8 percent growth target, the government would have to get at least 8 percent GDP growth beginning the second quarter and keep it until the end of the year — an ambitious goal, it would seem — but Carandang had no doubts they are going to pull it off eventually.

“At this point, Neda (National Economic Development Authority) has not officially revised our numbers downwards or anything and so we will stick to our targets and do our best to reach them,” Carandang told reporters in an interview.

Carandang explained that so many external factors affected the country’s first quarter growth citing the continuous rounds of oil price hikes caused by the consecutive civilian uprisings in Middle Eastern and North African countries during the past three months. –Charlie V. Manalo and Aytch S. de la Cruz, Daily Tribune