The Philippines may notch up Southeast Asia's biggest economic growth this year, but the country is sinking deeper into the red as investments drop, exports shrink and other key sources of revenue are hit by the global slowdown.
Analysts say that while many of its neighbors struggle to avoid recession, the Philippines is expected to post GDP growth of about, or just under, 3 percent this year.
Thanks to good weather boosting agriculture production and a relatively large population fuelling domestic-induced growth, the Philippines is less dependant on exports compared to Singapore and Malaysia, whose economies are expected to contract this year.
"But while Singapore has a strong war chest in terms of reserves and Malaysia has good savings, the Philippines doesn't have much ammunition up its sleeves during a downturn," noted economist Song Seng-wun of GK Goh Stockbrokers Pte Ltd.
Philippine foreign reserves of about US$14.5 billion are among the lowest in the region.
As the Sept. 11 terror attacks on the US take a toll on an already languishing global economy, Philippine exports -- the lynchpin of the economy -- are set to post their "worse ever annual decline" this year, Song said. Exports in August fell by more than 25 percent -- the worst drop in 20 years -- and Song expects the annual drop to be about 16-17 percent this year.
The government expects exports to contract by up to 15 percent in 2001 but is confident that GDP will grow by at least 3.3 percent year-on-year.
But falling exports will send the country's balance of payments deeper into the red and force Manila to borrow funds from abroad.
Plans are afoot to borrow up to US$500 million through the issuance of Japanese yen bonds by the end of November.
Doubts are also mounting on whether the government can keep its pledge to creditors that the full-year budget deficit will be limited to 145 billion pesos (US$2.8 billion) this year.
The budget deficit for the eight months to August reached a higher-than-targeted 99.53 billion pesos (US$1.95 billion).
Amid the gloomy scenarios, the government has forecast that the deficit in the overall balance of payments -- which largely captures the trade balance and investment flows -- will grow to US$2.2 billion.
Central Bank of the Philippines governor Rafael Buenaventura has said that foreign borrowings were likely if reserves fall to US$13.4 billion. The central bank had earlier targeted reserves of US$14 billion by year-end.
"If the forecast shows that there is no improvement in exports, and inflows run short, we may have to borrow to maintain a certain level of comfort in our gross international reserves," Buenaventura said.
QUIET START: Nearly a week after applications opened, agencies did not announce or promote the program, nor did they explain how it differed from other visitor visas Taiwan has launched a six-month “digital nomad visitor visa” program for foreign nationals from its list of visa-exempt countries who meet financial eligibility criteria and provide proof of work contracts. To apply, foreign nationals must either provide proof that they have obtained a digital nomad visa issued by another country or demonstrate earnings based on age brackets, the Bureau of Consular Affairs said. Applicants aged 20 to 29 must show they earned an annual salary of at least US$20,000 or its equivalent in one of the past two years, while those aged 30 or older must provide proof they earned US$40,000 in
AIR DEFENSE: The Norwegian missile system has proved highly effective in Ukraine in its war against Russia, and the US has recommended it for Taiwan, an expert said The Norwegian Advanced Surface-to-Air Missile Systems (NASAMS) Taiwan ordered from the US would be installed in strategically important positions in Taipei and New Taipei City to guard the region, the Ministry of National Defense said in statement yesterday. The air defense system would be deployed in Taipei’s Songshan District (松山) and New Taipei City’s Tamsui District (淡水), the ministry said, adding that the systems could be delivered as soon as the end of this year. The US Defense Security Cooperation Agency has previously said that three NASAMS would be sold to Taiwan. The weapons are part of the 17th US arms sale to
SERIOUS ALLEGATIONS: The suspects formed spy networks and paramilitary groups to kill government officials during a possible Chinese invasion, prosecutors said Prosecutors have indicted seven retired military officers, members of the Rehabilitation Alliance Party, for allegedly obtaining funds from China, and forming paramilitary groups and assassination squads in Taiwan to collaborate with Chinese troops in a possible war. The suspects contravened the National Security Act (國家安全法) by taking photos and drawing maps of key radar stations, missile installations and the American Institute in Taiwan’s headquarters in Taipei, prosecutors said. They allegedly prepared to collaborate with China during a possible invasion of Taiwan, prosecutors said. Retired military officer Chu Hung-i (屈宏義), 62, a Republic of China Army Academy graduate, went to China
UNITY MESSAGE: Rather than focusing on what Trump said on the campaign trail about Taiwan, Taipei should be willing to engage with the US, Pompeo said Taiwan plays a key role in Washington’s model of deterrence against China, former US secretary of state Mike Pompeo said in a speech in Taipei yesterday. During US president-elect Donald Trump’s first term, “we had developed what we believe was a pretty effective model of deterrence against adversaries who wanted to undermine the set of rules and values that the people of Taiwan and the people of the US hold dear,” Pompeo said at a forum organized by the Formosa Republican Association. “Succeeding in continuing to build this model will not solely rest at the feet of president Trump and his team,
RSS