MANILA, Philippines – The House of Representatives convened into a committee of the whole yesterday to hear from the Arroyo administration’s economic managers on the US financial meltdown’s impact on the local economy.
“The local impact is going to be very limited,” declared Finance Secretary Margarito Teves, citing the negligible exposure of local banks to US investment banks that have filed for bankruptcy like Lehman Brothers and Merrill Lynch, among others.
“We’re faced with more grim prospects, but if we’re better prepared, consult and help each other, the worst-case scenario will not happen,” Teves said. “If together we try to come up with solutions, if we’re lucky changes will come for the better in 2009.”
It was Albay Rep. Edcel Lagman who proposed that the lawmakers form a committee of the whole and get assurances from financial managers of the country’s resilience in the face of the global crisis.
The House started yesterday its plenary debate on the P1.415 trillion proposed national budget.
But Teves conceded that remittances from overseas Filipino workers would be affected.
“The amount of remittance that they (OFWs) will send will be reduced, therefore there will be an effect on the economy,” he said.
“We’re hoping that the likelihood of a slowdown (in the US) will be more manageable than a full-blown recession,” he said, predicting that a $700-billion bailout by the US Congress will soften the impact of the crisis.
“If there is a bailout, the chances of a recession taking place in the US are lower. If there’s a bailout, chances are the US may be facing an economic slowdown, instead of a full-blown recession,” Teves stressed.
The US Senate resoundingly passed a sweetened Wall Street bailout yesterday, spurring hopes that the US House would follow suit after killing an earlier bid to avert a world financial meltdown.
Budget Secretary Rolando Andaya Jr. told the House that the crisis in the US has been factored in the General Appropriations Act. “It (US crisis) started August of last year, and was already in our radar when we prepared the budget,” he said.
“It is in the budget, there is an increase in infrastructure by as much as 20 percent, around P30 billion, agriculture also got a 56 percent increase,” he explained.
Deputy Governor Diwa Guinigundo of the Bangko Sentral ng Pilipinas also downplayed the impact of the US financial woes on the local economy. “The root of all this is the fact that in 2000 the US Federal Reserve imposed a very easy monetary policy,” he said.
“There was an injection of money supply. They (Americans) were saddled by excessive money supply, even beyond what was considered as manageable,” the BSP official explained.
Budget talks stalled
Meanwhile, parochial and personal concerns of some congressmen have stalled the approval of the proposed P14-billion budget of the DOF.
In a recent hearing conducted by a House appropriations subcommittee chaired by Pangasinan Rep. Mark Cojuangco, the congressmen brought their concerns to the attention of Teves and his officials.
Leyte Rep. Andres Salvacion Jr. demanded that the Customs collector assigned at the Subic Bay Freeport be replaced or he would block the approval of the DOF budget.
It was not clear why Salvacion wanted the Subic collector removed from his post.
Customs Commissioner Napoleon Morales promised to look into the Leyte lawmaker’s concern.
Another congressman, Jose Aquino of Agusan del Norte, complained that Morales’ agency has not released a motorcycle he imported despite his payment of duties and taxes.
Rep. Maria Mitzi Cajayon of Caloocan City requested Teves to transfer her city’s treasurer, but did not say why she was seeking the transfer.
For his part, Rep. Glenn Chong of Biliran said the DOF should not approve the proposal of his governor that the province be allowed to obtain a loan for the purchase of computers.
He said he has information that the province has money for such purpose.
Chong is a political enemy of former congressman Gerardo Espina, whose son is governor of their province.
Before the start of the hearing, Cojuangco cautioned DOF officials against making promises that they cannot keep.
Teves and his officials listened patiently to the House members’ personal concerns, which did not have anything to do with the DOF budget.
The Commission on Appointments (CA) of the last Congress did not confirm Teves.
His father, then Negros Oriental Rep. Herminio Teves, before ending his term as a member of the last Congress, accused some colleagues of his in the House who were CA members of allegedly extorting P5 million from his son in exchange for his confirmation. – With Jess Diaz