GMA administration curbs terrorism, budget deficit in 2003

The Arroyo administration entered 2003 with the challenge to keep the budget deficit in control and curb terrorism in the country.

The year ended with a crippled Abu Sayyaf terror group and a major blow to Jema’ah Islamiyah, the Asian link of the al-Qaeda terror network, and possibly a budget deficit of slightly lower than the target of P202 billion.

Abu Sayyaf leader Ghalib Andang, widely known as ‘Commander Robot,’ who was responsible for the kidnapping of 21 hostages from a Malaysian resort was captured in Indanan, Sulu last Dec. 7.

Earlier another Abu Sayyaf bandit Abdulmukim Edris was killed by government operatives while his comrade Omar Opik Lasal was captured in October.

But probably the government’s biggest victory against the Jema’ah Islamiyah was the killing of self-confessed Indonesian bomber Fathur Rohman Al-Ghozi during a gun battle with soldiers and police in North Cotabato following his escape from Camp Crame, and the capture of Jema’ah Islamiyah liaison and finance officer Taufek Refke in Cotabato City last October.

"We are winning the war against terrorism and crime and what triggers uncertainty is the heavy atmosphere of politicking and partisan division," President Arroyo said.

Political noise has been blamed for the continued depreciation of the peso, the slide in the flow of foreign direct investments and short-term or portfolio investments.

The President recognized that the country faces "some problems in economic confidence, but these do not arise from the threat of terrorism or peace and order-related issues."

Presidential Spokesman Ignacio Bunye noted that no kidnap-for-ransom case was reported since the police force implemented the checkpoint and beat patrol system in Metro Manila.

Political noise has been blamed not only by the government economic managers but even by the International Monetary Fund (IMF) as the main culprit for the country’s economic woes in 2003.

Bangko Sentral ng Pilipinas Governor Rafael Buenaventura said the flow of foreign direct investments and portfolio or short-term investments could have been better, without the political noise and events like the July 27 mutiny of junior officers of the Armed Forces of the Philippines (AFP).

Foreign direct investments plunged by 310.3 in January to September 2003, compared to the same period in 2002, while portfolio investments declined by 98.1 percent.

"While the number of Philippine companies joined the rest of global investors in establishing their presence across Asia, inflows of equity to the Philippines have been minimal as investors waited for firmer signs of economic recovery and for political stability to be restored," Buenaventura said.

The plunge seriously affected the country’s capital and financial account which includes payments of capital transfers and acquisition or disposal of non-produced and non-financial assets, resulted from the plunge in foreign direct investments and portfolio or short-term investments.

As a result, the country’s balance of payments which is the total of economic transactions of the country with its residents and the rest of the world was at a deficit off $167 million in the first nine months of 2003.

Despite the economic difficulties, the Arroyo administration was able to comply with its commitment to increase the salaries of soldiers, policemen and teachers.

The President has also ordered the continued implementation of her housing program, moving the National Housing Authority (NHA) to construct 24,153 housing units all over the country for the first 11 months of 2003.

The Arroyo administration faces new challenges in 2004, as investors adopt a wait-and-see attitude before deciding to put more money into the Philippines.

Investors are apprehensive about any major shift in the wake of the presidential elections in May 2004. – PNA