Palace pooh-poohs WB’s negative economic forecast

Malacanang Palace belittled a recent World Bank (WB) negative economic forecast for the country, saying that the Philippine economy remains strong and resilient despite the global economic crisis.

Gary Olivar, the deputy presidential spokesman for economic affairs, told a press conference on Friday that the government takes the concerns of the WB seriously but he believes that the country could overcome the challenges posed by the economic crisis.

“We have reason to believe that we should have more confidence in our people, in our leadership than they [WB] seem to have. If we look at the resiliency of the economy, the way it performed from the first quarter, if we look at history, we are capable of pulling out surprises for the experts abroad,” he said.

According to Olivar, the World Bank made a wrong comparison when it compared the recent situation to the Asian financial crisis in 1997 because the two, he said, are entirely different.

“They [WB] are saying that we are showing slight negative growth of 0.5 percent similar to what happened right after the Asian financial crisis and with that view, of course, I would like to point out that is different from the situation that we have now,” Olivar said.

During the same press conference, Press Secretary Cerge Remonde said that the World Bank’s forecast was based on the assumption that remittances from overseas Filipino workers (OFWs) are dwindling when, he added, it is not the case.

“Many of these analyses of forecasts that tend to underestimate our economic performance are based on certain assumptions, [such as that] there will be a significant decrease in the remittances of OFWs. This is far from the truth because records will show that despite the onslaught of the economic crisis, there has been no significant decrease in the remittances of OFWs and on the contrary their remittances continue to increase,” Remonde said.

The World Bank expects the Philippine economy to contract 0.5 percent in 2009.

It said that most Filipinos are refusing to spend their extra cash for fear that foreign financial institutions that hold their savings might fail.

The WB added that remittances, a major source of disposable income of Filipinos, would contract by 4 percent in dollar terms this year but would post a 2-percent recovery in 2010.

The local labor market, it said, will also remain sluggish, especially with increased employment in the informal sector, unpaid family workers and the increase in the number of self-employed individuals.

The Philippine economy, the World Bank said, will suffer a recession this year because of its inability to benefit from “green shoots” of the global economy.

Since the country’s major trading partners are the United States, Japan and Europe, economic expansion in China—seen to lead the global development—would have a limited impact on the Philippine exports’ sector, it added.

SOURCE: The Manila Times Online, http://www.manilatimes.net/national/2009/july/11/yehey/top_stories/20090711top2.html