Palace: Supreme Court decision will boost economy

The Supreme Court ruling upholding the legitimacy of the Arroyo administration and rejecting immunity for former President Joseph Estrada would likely boost the economy, presidential chief of staff Renato Corona said yesterday.

Corona expects a boost in confidence in the local financial markets, which were already closed when the Supreme Court released its 13-0 vote to uphold President Arroyo’s administration late Friday.

"The ruling is definitely reassuring to us. We are going to get the economy turned around in no time," Corona told wire news agency Agence France Presse.

Corona likewise denied Estrada’s allegations that members of Supreme Court were pressured to swiftly rule on Estrada’s two petitions.

"President Arroyo does not have a single appointee in the Supreme Court. He (Estrada) has five. If there are any chances of pressuring, it would have been him, not us," Corona stressed.

Financial analysts echoed Corona’s confidence and indicated that both the peso and the Philippine Stock Exchange are expected to improve when trading resumes today.

Concerns over Estrada’s petitions caused the PSE main index to shed nearly five percent in last week’s first four trading days to close at 1,596.97 on Friday.

The peso had also been on a down tick allegedly due to Estrada’s insistence that he is still the legitimate president despite the military-backed civilian uprising that ousted him on Jan. 20.

But stock brokers now expect the local bourse to improve in the short-term and possibly breach psychological ceilings after it slid to record lows during the last weeks of the Estrada administration.

Currency traders also expect the peso to improve to below 48 to the dollar and may even break the psychological barrier of 47 to the dollar after closing at 48.34 per dollar last week.

"The ruling will be positive for the market and the peso should improve now that the political factor isn’t important anymore," said Deputy Governor Amando Tetangco of the Bangko Sentral ng Pilipinas.

"The political hindrance delaying the inflow of funds from local and foreign investors has now been cleared," said Mark Securities Corp.’s chief market strategist Manny Cruz.

Former Speaker Jose de Venecia Jr., for his part, said the SC ruling would also bolster foreign commitments to mobilize the political and economic support of Christian Democratic governments all over the world to help rebuild the battered economy.

De Venecia, in a statement, said the Christian Democrats International (CDI) has already passed a resolution pledging support from governments in Europe and Latin America.

De Venecia, national chairman of Mrs. Arroyo’s Lakas-NUCD-UMDP, initiated the resolution in his capacity as CDI vice president.

Former Sen. Ernesto Herrera also predicted the SC ruling would bolster the stock and currency markets but stressed that the Arroyo administration must gain a decisive majority in Congress to implement vital economic reforms.

"The next crucial test for the new administration and for our people will be the coming polls," Herrera said.

"We must prevent pro-Estrada candidates from establishing a foothold in either the Senate or the House, because if they do, they will spoil everything for the new administration, including the recovery of Estrada’s ill-gotten wealth," Herrera added.

The government’s moves to recover Estrada’s alleged ill-gotten wealth had been stymied when Estrada claimed presidential immunity from suit.

But nine SC justices ruled that Estrada cannot be immune from criminal charges. Four other justices reserved their opinions but there were no dissenting votes to the majority.

Former Sen. Wigberto "Bobby" Tañada also expressed surprise at the SC vote on the immunity issue> "I had high hopes that there will be 13-0 vote on the loss of immunity issue. Since all 13 justices voted on the legitimacy of (Mrs. Arroyo’s) presidency, Estrada’s loss of immunity should have automatically followed," Tañada said.

But while analyst agree that the SC ruling would bode well for the economy in the short-term, economists predict that the government would have difficulties with the economy in the medium-term.

All Asia Capital research head Helen Alvarez said one of Mrs. Arroyo’s biggest headaches was how to trim the burgeoning budget deficit which is expected to hit some P145 billion this year. - Jess Diaz