Gov’t economic team launches roadshow to woo local investors

With legal controversies still brewing over Presidential Proclamation 1017, the Arroyo administration has decided to woo local investors and the business community to refocus attention on the country’s economic fundamentals.

The government economic team led by Finance Secretary Margarito Teves went on a regional roadshow this week, starting with a meeting with the Arroyo stronghold in Cebu to discuss the economic outlook for 2006.

The regional briefings started in Cebu yesterday with similar events scheduled in Davao and Pampanga together with the National Economic and Development Authority (NEDA) and senior officials of the Bangko Sentral ng Pilipinas (BSP).

After conducting roadshows in Japan, Hong Kong and Singapore, Teves said the economic team wanted to focus on local investors and redirect the attention away from politics and towards fiscal and economic reform, reducing the deficit and increasing investor confidence.

"The national budget deficit went down to P146.5 billion in 2005, the lowest in four years and 18.6 percent better than target," Teves said. "Our efforts to improve tax collection efficiency have also begun to bear fruit, with 2005 revenue collections 14 percent higher than the year before."

Teves told Cebu businessmen the investment climate was also steadily improving, as reflected in the BSP’s Business Expectations Survey for 2006, which he said demonstrated the business community’s optimistic outlook across all sectors for the first two quarters of 2006.

"The government will continue to work closely with the private sector, in particular the small and medium-sized enterprises, to ensure that business owners understand how the tax system works and that it is implemented effectively," Teves added.

Teves assured businessmen that the Arroyo administration would "continue working to enhance public confidence by ensuring the efficient collection, as well as the proper and transparent use of these revenues."

On the other hand, Trade Secretary Peter B. Favila said Cebu had been crucial in the continued development of the national economy, considering its contribution to the growth of exports particularly in the electronics, furniture and food sectors.

According to Favila, Cebu was also emerging as a major center for the information and communication technology (ICT) industry, a priority sector for the Philippines.

"We continue to work on improving the business climate in the Philippines, directing our efforts to attracting even more foreign investment especially in the priority growth sectors of the various regions."

Favila said Central Visayas was one of the fastest growing regions in the country. With the exception of 2002 and 2003, the growth rate of the regional economy was higher than the national average in the last seven years. For 2006, the National Economic Development Authority (NEDA) Regional Office VII is projecting regional GDP to grow between 5.9 and 6.4 percent.

BSP Deputy Governor Diwa C. Guinigundo said, on the other hand, that business should continue to be robust especially since the strength of the peso would support cheaper imports for exporters.

"The peso has held strong, boosted by an improved fiscal position, credit rating outlook upgrades, and smooth implementation of the VAT increase during the first quarter of this year," he said.

"We are confident that we will meet our fiscal targets for 2006 and our goal of a balanced budget by end-2008," Teves said. "Continuing to strengthen our revenue collection efforts and increasing investment in social services and infrastructure should result in sustainable growth that will have a positive and significant impact."