Press Release
August 24, 2009

ANGARA: RP ECONOMY STRONG AMID CRISIS;
OFW REMITTANCE RISING

Calls on Filipinos to dispel recession rumors; continue support to government initiatives

Sen. Edgardo J. Angara renews his commitment and assurances to the Filipino people that the country will not bow down to the current global financial turbulence felt mostly in many transition and developing economies. He also lauds the strength of foreign remittances from OFWs as one of the leading stabilizing factors to the domestic economy.

"As the Philippines experienced only minimal effect of the global economic crisis despite previous forecasts of a grim future for the country, the government remains resilient, defying the international observation of Asian economy to be contracting this year," notes Angara, Chair of the Senate Committee on Finance.

He adds, "Such defiance, with the World Bank and the International Monetary Fund citing a drastic slump in foreign remittances from OFWs and claiming the country is heavily dependent on exports, is seen in the steady growth of many of our business sectors."

Last year the economy posted only a 4.6% growth, significantly down from 2007's thirty-year high of 7.0%. The first quarter of this year saw growth slide down to only 0.4 percent with key exports sales levels to the US and Europe fell. Electronics products and parts, which comprise over half of the country's exports, dropped 34.5% in the first half of 2009. Falling revenues and increasing spending have also caused the country's budget deficit to rise up to P153.4 B, a 752.2% rise from the same period last year. Also, the government is expected to resort to more foreign borrowing for its economic stimulus but keeping budget deficit within a P250 B ceiling.

But while most of the world's leading economies suffered the global meltdown, the Philippine economy has avoided technical recession. In contrast to the grim warnings of the World Bank and the IMF, remittances from the eight million OFWs have continually risen this year. Latest figures in May showed that remittances during the month rose 3.7% year-on-year to a record $1.48 billion. From January to May, OFWs sent $6.98 B, a 2.8% increase on the year before.

"The World Bank and the IMF underestimated their forecast about OFW remittances. They simply assumed that because overseas remittances to other countries had fallen, it would be the same situation in the Philippines. Remittances remain resilient because OFWs are in higher, more skilled positions and so are less dispensable than other foreign workers.

Other sectors such as the outsourcing industry, tourism, and agri-fisheries are still doing well, although there could still be lots of room for improvement.

"There are many good signs that the economy is braving through this global crisis. The Department of Labor has predicted that remittances will exceed $17 billion this year, which would be a 3.6 percent increase from 2008. This will further be stimulated by the emerging micro- and medium-sized entrepreneurial ventures that Filipinos have started to embrace, enabling our people to do business and invest; as well as through attract investors to tap our resources and strong labor," notes Sen. Angara, author of many Senate Bills that aim to strategically enable many Filipinos to weather the crisis and encourage investment activities. Among such laws are the Corporate Recovery and Insolvency Act, and the Collective Investment Schemes Law and the Real Estate Investment Trust Act.

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