RP to continue fiscal stimulus program

SINGAPORE – President Arroyo said yesterday that the Philippines will continue its fiscal stimulus program and would issue more bonds to finance it.

Shortly upon her arrival here from Manila, the President addressed representatives from the Filipino community at a dinner held at the Fullerton Hotel where she is staying for her two-day visit.

The President said that it is still too early for an exit plan for the fiscal stimulus, the same position taken by the Asia-Pacific Economic Conference (APEC) finance ministers during their meeting here last Thursday.

“(During the minister’s meeting) it was discussed when the fiscal stimulus should be taken out because all the countries have fiscal stimulus including us and I said no, it’s too early for an exit plan,” the President said.

At the height of the global financial crisis, almost all governments came out with their fiscal stimulus packages to help prop up their respective economies.

During the APEC meeting, some of the discussions focused on the need to formulate exit strategies for the fiscal stimulus packages because the resulting deficits would not be sustainable.

A consensus was reached by the APEC ministers that the stimulus packages would continue until strong recovery is assured.

Mrs. Arroyo said that the issue now is on how to finance the stimulus package with domestic resources already very tight.

The President noted that the Philippines would continue to borrow abroad to finance this.

“At least what I can say is that in the Philippines, we can still finance the fiscal stimulus. Our bonds are still very, very marketable,” the President said.

“So that is why, among many other things, I believe we are resilient and we will bounce back to the growth that we were talking about when I came here in 2007, the rapid growth we achieved before it slowed down somewhat but at least never turned negative during the global economic crisis,” the President added.

Just last month, the government issued $1 billion in 25-year global bonds, which was its third issue for this year.

Finance Secretary Margarito Teves previously stated that the government is also considering the issuance of Yen-denominated Samurai Bonds early next year.