ANGARA REACTS ON FITCH RATING BUREAU COMMENTS
 ON RP's STIMULUS FUND

Sen. Edgardo J. Angara today said that the Fitch Rating Bureau should be commenting on the P50 billion stimulus fund put together by Congress since it is the legitimate way of appropriating money as embodied in the FY 2009 budget.

"I have read reports on the comment of Fitch - one of the rating agencies who rates sovereign credit - doubting the capacity of the Philippines to put together and spend and disburse a stimulus fund. I thought I need to address this because it's damaging to our country. The Fitch Rating Bureau was not addressing the P50 billion legislative stimulus fund which is in the FY 2009 budget. It was analyzing the announced P300 billion stimulus package and I myself is doubtful where the P300 billion will come from," said Angara who chairs the Senate Committee on Finance.

He added, "That comment is damaging to us. Someone should stand up and say 'No. That's not a stimulus fund. You judge the stimulus fund put together by Congress, because that's the legitimate way of appropriating money.' Because as I understand it, under a system of government like ours only Congress can appropriate a spending package like that, unless someone now has invented a money printing press and going to print P300 billion."

According to statements made by Fitch Ratings, the global debt watcher doubts whether the Philippine government can successfully implement a proposed P330-billion economic stimulus package citing questions on whether the fiscal stimulus of the government would actually be spent. This was based on a statement made by James McCormack, head of Asia Pacific Sovereigns at Fitch.

McCormack also said that since the Philippine government is small it would have less capacity to deliver the stimulus program. He also said that it will be difficult for the Philippine government to get the money spent. He also questioned the government's capability to shore up its logistics and people.

Angara, meanwhile, also doubted the capacity and the willingness of the private sector to bankroll the stimulus fund, this statement was made after pronouncements that the part of the stimulus fund will be provided by the private sector. He thought of it as a "ridiculous claim."

He said the reason, precisely, why government is coming forward and will be spending tax money is because the private sector is not spending and will not spend.

He cited the situation now wherein there is so much money in banks and yet these banks are not lending. The Global Financial Crisis has resulted in a financial regime wherein the risk is too high, risk is almost endless and the end insight is nowhere.

"So why would the private sector put up P50 billion as claimed?" he added.

Angara also pitched in a piece of advice to public officials during this time of financial crisis.

"This is a time of great uncertainty. Public officials, but specially, people from Congress who are putting the money together, must be clear and unambiguous about their statements. Because the people are already troubled and uncertain, we should not be the ones to add uncertainty to these uncertain times," said Angara.