Philippines growing more quickly than thought, says ADB

In another sign of the Philippines' improving prospects, the Asian Development Bank raised its forecast of 2012 GDP growth from 4.8 per cent to 5.5 per cent, according to the lender's updated Asian Development Outlook 2012 released on Wednesday.

 

The Philippines was one of a handful of countries that escaped the ADB's sharp scaling down of forecasts for the region, which is now seen growing by 6.1 per cent this year instead of the 6.9 per cent in the bank's original projections released in April.

 

The ADB said it raised its forecast for the Philippines after the economy grew by a better than expected 6.1 per cent in the first half of the year. The government itself expects growth to reach 5 to 6 per cent this year from 3.9 per cent last year.

 

Apart from higher growth, the ADB is also predicting slightly lower inflation and an improved current account balance in 2012. It sees consumer price inflation at 3.4 per cent, down from its original forecast of 3.7 per cent. The current account balance is seen rising to 2.6 per cent of GDP, up from the original forecast of 2.1 per cent.

 

This leaves the central bank, which has recently cut rates to record lows, with more room to ease monetary policy and sustain growth momentum amid tougher global economic conditions. The ADB said:

 

There is room for further policy support for economic growth if required. Modest inflation (well within the central bank's 3.0-5.0% target range), a strong external position, and an appreciating currency suggest that monetary policy can stay accommodative, at least in the near term. Fiscal outlays fell $2 billion short of the budgeted amount in the first half of the year, despite the boost in government spending.

 

But the bigger challenge facing Philippine policy makers is making sure the benefits of economic expansion are enjoyed by everybody. Despite faster GDP growth, joblessness remained high at 7 per cent in the first half of the year, while under-employment rose to a six-year high of 22.7 per cent.

 

It's not going to be easy. The government must make progress removing stumbling blocks that have hampered agriculture and industry, the main sources of jobs.

Benjamin Diokno, an economist and former budget secretary, wrote a newspaper column outlining what needs to be done to make growth more inclusive:

Agriculture, which employs about one-third of the country's labor force, has to find new life. A big part of the sector's growth is retarded by the uncertainty brought about by agrarian reform. Injecting new life in the industrial sector, the source of many productive, decent jobs, requires better infrastructure, specifically better roads so that goods can be transported from one point to another at less cost.

 

Philippine Peso Little Changed as Europe Damps Investor Appetite

 

The Philippine peso was little changed, after gaining the most in more than two weeks yesterday, on concern a prolonged slowdown in Europe will damp demand for emerging-market assets. Government bonds fell.

 

Euro-area retail sales contracted for a 12th straight month in August from a year earlier, data showed today. The European Central Bank meets tomorrow, when officials are expected to leave borrowing costs unchanged at a record-low 0.75 percent, according to a Bloomberg survey. The peso climbed yesterday after a surprise jump in U.S. manufacturing boosted the Asian nation's export outlook, while the Asian Development Bank upgraded the nation's growth forecast today.

 

"The good U.S. data has been neutralized by concern over Europe," said Jonathan Ravelas, chief market strategist in Manila at BDO Unibank Inc. "Investors still have this guarded optimism on the Philippines."

 

The peso closed at 41.600 per dollar compared with 41.605 yesterday in Manila, according to Tullett Prebon Plc. It dropped as much as 0.2 percent earlier. The currency touched 41.590 on Oct. 2, the strongest level since Sept. 20. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 5.3 percent.

 

The Asian Development Bank lifted its 2012 economic growth forecast for the Philippines to 5.5 percent from 4.8 percent. The peso has strengthened 5.4 percent this year, the best performance in Asia.

 

Consumer prices rose 3.8 percent in September from a year earlier, the same as in August that was the fastest since January, according to the median estimate of economists in a Bloomberg News survey before a report due Oct. 5.

 

The yield on the 4.75 percent notes due September 2022 increased three basis points to 4.75 percent, according to prices from Tradition Financial Services.

 

Financial Times, Bloomberg Business Week

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Filipino Americans Show Vigilance over Cybercrime E-martial Law in the Philippines

 

The Philippine government has enacted the Cybercrime Prevention Law, a piece of legislation aimed to regulate unlawful internet use. Nicknamed E-Martial Law by human rights advocates, this law has been deemed a broad instrument for violating people's rights to free speech, press, and due process as it targets a crime termed "online libel". The law gives the Philippine government expanded power to surveille people's activity on the internet and specifically charge political dissenters with criminal activity, simply for expressing opinions against the government.

 

"Through the enactment of Martial Law in the in 1970s, the Philippine ruling elite sought to quell people's protest on the streets through censorship, police brutality, mass incarceration, enforced disappearances, extrajudicial killings, and other unmitigated human rights violations. Now, E-Martial Law seeks the same in a digital age," stated Bernadette Ellorin, Chairperson of BAYAN USA. "But just as Martial Law culminated in a people's organized overthrow of the fascist dictatorship of Ferdinand Marcos, E-Martial Law is being met with widespread and worldwide protests on the internet as well as in the streets."

 

Filipino-Americans understand this struggle, especially in the context of the United States, a country that prides itself in valuing its First Amendment rights and freedoms. Just a year ago, similar acts, the Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA), were on the table. The passage of these bills were halted in the United States Congress in January 2012 by people who mobilized and rallied in the streets against the potential threat such legislation held against freedom of speech and due process.

 

"The internet has served as a vast platform for creative protest," said Ellorin. "Activists have sought social networking websites as an innovative space to increase public knowledge about economic, social, and political injustices. The internet has allowed them to gain broad support all over the world in fights against oppressive regimes, like that of President NoyNoy Aquino."

 

Internet rights continues to be a relevant issue as the United States engages in secret trade negotiations known as the Trans-Pacific Partnership Agreement (TPPA). Critics of the TPPA warn that the neoliberal free trade agreement will trample on people's access to basic rights, such as food, water, medicine, and even the internet. Private corporations will be granted unbridled rights to patent and own otherwise public resources solely for their profitable gain.

 

"Laws drafted by the ruling class to prevent 'internet crimes' benefit a privileged few: big corporations and ruling regimes who want to maintain power and control over ideas and facts," Ellorin explained. "Efforts to criminalize the development and dissemination of opposing ideas and facts forces the people under surveillance by a fascist state. When every status update and blog post is under strict scrutiny, the people will not be silenced as the government hopes. Our protest will only multiply and find other ways to spread."

 

In addition to protests on social media sites, "offline" street protest actions are being conducted in front of the Supreme Court in the Philippines today by broad formations of human rights advocates, journalists, bloggers, netizens, and activists. These groups have vowed to express their dissent against the Cybercrime Prevention Law until it is junked, and have even filed official petitions challenging the law's constitutionality. BAYAN USA seeks to offer their support from abroad and build an international outcry against internet tyranny and human rights abuses in the Philippines.

 

Join BAYAN USA in this protest by clicking the following link and signing an online petition drafted by the Kabataan (Youth) Partylist against the Cybercrime Prevention Act of 2012: http://www.change.org/petitions/junk-the-cybercrime-prevention-law . The goal is to reach 1 million signatures.

 

BAYAN-USA is an alliance of 18 progressive Filipino organizations in the U.S. representing youth, students, women, workers, artists, and human rights advocates. As the oldest and largest overseas chapter of Bagong Alyansang Makabayan (BAYAN-Philippines), BAYAN-USA serves as an information bureau for the national democratic movement of the Philippines and as a campaign center for anti-imperialist Filipinos in the U.S. For more information, visit www.bayanusa.org .

 

ASIAN WEEK

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