"Our No. 1 challenge is the perception of our peace and order," the President said in the third and final episode of her yearend report aired live from the Mansion House in Baguio City. "Everybody is saying our macroeconomic policy is very good. We should just take care of perceptions of peace and order."
A survey by the Economist Intelligence Unit showed that the Philippines was considered one of the worst places in Southeast Asia to do business in because of corruption, crime and violence.
Mrs. Arroyo said the Abu Sayyaf bandits in Mindanao and urban kidnapping remained the biggest obstacles to economic growth.
The Chief Executive said foreign and local investors, as well as international finance institutions, have expressed their approval for the country’s economic policy but noted that security conditions needed to be improved.
"If our economy was stable in 2001, maybe we can hope that it will remain healthy next year," Mrs. Arroyo said.
She said some $4 billion in trade agreements signed when she was on a working visit to the United States last month would continue pouring in next year.
Mrs. Arroyo also said the full operations of the Malampaya gas project inaugurated in October should reduce the burden of imported crude.
Responding to a phoned-in question, Mrs. Arroyo held it likely that Muslim secessionist rebels have showed signs of their desire to lay down their arms and rejoin mainstream society. However, she was quite unsure about the communist insurgents.
Citing intelligence reports, Mrs. Arroyo said the communist rebels have not abandoned their objective of overthrowing the government.
She expressed hopes that the urban hit squads of the New People’s Army would stop their political assassinations and support instead the government.
The separatist Moro National Liberation Front (MNLF) signed a peace accord with the government in September 1996, and its qualified fighters integrated into the regular police and military services.
For its part, the Moro Islamic Liberation Front, a breakaway faction of the mainstream MNLF, abandoned its peace talks with the government under the administration of former President Joseph Estrada who ordered an all-out war against the Muslim rebels in 2000.
Estrada as ousted by a military-backed popular uprising last January following a failed impeachment trial prompted by charges of massive corruption.
Peace negotiations were also being pursued with the Communist Party of the Philippines (CPP), which declared earlier a month-long unilateral truce during the holidays.
However, CPP founding chairman Jose Ma. Sison, who has been in self-exile to the Netherlands, threatened anew to scuttle the peace talks if the government failed to create its panel for a joint committee that will monitor human rights violations by both sides
At the same time, the President reiterated her appeal to the political opposition to observe a moratorium on partisan politics for the sake of national unity and program.
"I call on the political opposition once again to join my administration in declaring a moratorium on too much politicking. I hope that in the next 12 months, there will be unity among all political parties," Mrs. Arroyo said.
The Abu Sayyaf, which styled itself as freedom fighters struggling for an independent Islamic state in Mindanao, has engaged in mass kidnapping for ransom and other terrorist activities.
The group is still holding American missionary couple Martin and Gracia Burnham of Wichita, Kansas and Filipino nurse Deborah Yap in their jungle lair in Basilan.
The Burnhams were snatched from the posh Dos Palmas island resort off Palawan on May 27, along with fellow American Guillermo Sobero of Corona, California and 17 other guests and workers of the facility.
Sobero and some of the Filipino hostages was later beheaded by the Abu Sayyaf in an apparent bid to force ransom payments.
The other hostages were either reportedly rescued or released amid rumors of ransom payments.
Abu Sayyaf gunmen also raided the Malaysian upscale resort of Sipadan in April 2000, capturing nine Europeans, nine Malaysians and three Filipinos.
All except one of the Filipinos, Roland Ullah, have been freed as huge amounts of money reportedly changed hands, mostly in dollars.
Abu Sayyaf bandits also seized a group of Catholic evangelists led by Wilde Almeda, a handful of foreign and local journalists covering the Sipadan hostage drama, and American Jeffrey Schilling who was freed after one year of captivity.
The country was likewise labeled the "kidnap capital of the world" as kidnap-ransom-syndicates sowed terror in urban centers, victimizing mostly wealthy members of the Filipino-Chinese community.
Police reported that kidnapping incidents rose by over 100 percent this year compared to last year’s figure.
Amid grim predictions of a global economic slump, the President vowed to create four million new jobs as she painted a rosy picture of the Philippine economy next year.
In her weekly radio-television program aired from the presidential Mansion House here the other day, the President expressed optimism that the country would sustain its economic growth, rein in inflation, bring down unemployment and curb foreign exchange speculation..
"Countries like Singapore are in recession, but we have positive growth. Our peso is stable. The price of rice is stable," Mrs. Arroyo said.
"We have survived the storm and our economy has stabilized because of the growing number of jobs, aided by industrial peace and good relations between labor and capital," the President said.
She pointed out that the new jobs would come from emerging small and medium-scale enterprises, the tourism and transportation sector, information and communications technology as well as the agriculture modernization program.
The Chief Executive has designated businessman Luisito Lorenzo as her adviser for job generation in the agriculture sector.
She brushed aside fears that the Philippines could be affected by the crisis in Argentina. "That is far away. The fall of their GNP (gross national product), their high inflation rate, the shortage of food...it is far from our situation."
She cited Congress’ passage of economic reform bills and the success in keeping the budget deficit within government ceilings despite skepticism from international institutional like the International Monetary Fund.
In the second episode of her year-end report aired the other day, the President vowed to create four million new jobs next year.
"Countries like Singapore are in recession, but we have positive growth. Our peso is stable. The price of rice is stable," Mrs. Arroyo said.
"We have survived the (economic) storm and our economy has stabilized because of the growing number of jobs, aided by industrial peace and good relations between labor and capital," the President said.
She pointed out that the new jobs would come from emerging small and medium-scale enterprises, the tourism and transportation sector, information and communications technology as well as the agriculture modernization program.
The Chief Executive has designated businessman Luisito Lorenzo as her adviser for job generation in the agriculture sector.
She brushed aside fears that the Philippines could be affected by the crisis in Argentina. "That is far away. The fall of their GNP (gross national product), their high inflation rate, the shortage of food...it is far from our situation."
She cited Congress’ passage of economic reform bills and the success in keeping the budget deficit within government ceilings despite skepticism from international institutional like the International Monetary Fund. — With reports from Artemio Dumlao