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PHILIPPINES


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 80,574 77,076 71,400 43
         
GNI per capita
 US $ 1,080 1,020 1,050 135
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 079 - (26/09/10)


Bringing order out of chaos
Philippine President Benigno Aquino is in New York this week to attend the United Nations General Assembly and to plead the case for putting his country back on the global map of preferred investment destinations.

With continued high popularity ratings at home and signs that the economy is once again improving, he should be walking tall. But sadly he has a ball and chain around his ankles as his country continues to be seen internationally as a base for terrorism, kidnapping and hostage taking.

Firstly, on the economic front, recovery in the global economy has seen a rebound in exports and an acceleration in inbound remittances as overseas demand for Filipino workers recovers. As a result, the Philippines saw its current account surplus rise to US$2.6 billion in the second quarter of the year – up from $2.2 billion during the same period last year. Total current account surplus for the first half of the year amounted to $4.4 billion ($4.27 same period last year).

Inflation, at 4.0 percent in August, remains within the official forecast range of 3.6–4.5 percent and for the first eight months of the year has averaged 4.2 percent – a pleasing result and one which the central bank (Bangko Sentral ng Pilipinas) will allow key interest rates to remain at historically low levels, further assisting economic recovery. The BSP’s overnight borrowing and lending rates, which influence commercial bank lending costs, are at 4 and 6 percent. The policy rates have stayed at these levels since July last year.

Earlier, government had revealed an estimated growth forecast for 2010 of between five and six percent. However it is now hoping to see GDP rise by at least seven percent this year and to sustain this level into the future. The average during the Arroyo government was four percent.

Business confidence has improved and publicly listed companies are reporting growth in earnings and improved domestic demand. The government is also moving to unlock the potential of the country’s mining sector by targeting speculators and freeing up claims and tenements that have been sitting idle for many years. The Philippines is a country of enormous mineral wealth but in the past parochial and vested interests have thwarted plans to develop a world-class mining industry in the Philippines. Similarly in agriculture, with the dusting off of plans to develop Mindanao as Asia’s bread basket.

We have heard all of this before of course, but there is a general feeling of optimism that this time the results may be different.

Three months into the Aquino presidency, this is the positive side of the ledger that Aquino will be focusing on in New York. But what about the other side?

As President Aquino was departing the country, he was handed the report of the government fact-finding panel into the August 23 hostage crisis in Manila. Former Senior Inspector Rolando Mendoza was dismissed from the Philippine National Police over allegations of bribery, stormed a tourist bus filled with visitors from Hong Kong. After negotiations broke down, Mendoza went on a shooting rampage which left eight Hong Kong tourists dead and several others wounded. Mendoza died when police stormed the bus. The incident, played out on national television and broadcast around the world, has once again focused attention on the dark side of the Philippines. The incident itself could have happened anywhere; however the chaotic handling of a crisis situation has once again shown the lack of discipline and control and the poor chain of command that turned the incident into a nightmare.

Hong Kong and China reacted swiftly, condemning the Philippines for the manner in which it handled the crisis and issuing warnings to Chinese citizens not to travel to the country. Chinese (including Hong Kong) tourists make up around nine percent of the country’s inbound tourism market and so far cancelled visits have resulted in a loss of around three percent or PhP40 million (almost US$1 million or GBP580,000).

Police Chief Jesus Verzosa retired three months ahead of schedule to avoid a possible sacking and has been replaced by Raul Bacalzo.

The 83-page report which, as a courtesy, was passed to the Chinese Embassy in Manila before being made public, recommended that charges be brought against 12 persons responsible for the bungled operation. In a statement that drew some criticism from journalist, President Aquino blamed the incident on a lack of resources for training and equipment. Others claim it is a lack of negotiating skills and failure to secure the area surrounding the hostage scene that were to blame. It appears that the arrest of Mendoza’s brother, also at the scene and filmed for television caused the hostage-taker to lose control and start shooting. It appears that he could see all that was happening outside from the TV installed in the bus. Yet, the police command centre at the scene had no TV and was not so informed.

So while officials have been roundly criticised for their handling of the event, the media – and especially the TV news media – have been similarly criticised for hampering the rescue operation.

How President Aquino handles this particular crisis from this point will be critical to sustaining his popularity domestically as a leader and as a president who deserves respect on the international stage.

As if this wasn't enough, on 9 September the trial began in Manila of those responsible for the worst-ever political massacre that occurred in Mindanao that took place in November 2009. Known as the Maguindanao massacre, 57 people were left dead in what is alleged was a planned attack by the powerful Ampatuan clan, allies or former President Arroyo, on a rival clan. Testimony given at the trial and reported in the media has been chilling. It shows how one powerful political clan sought to wipe out a rival clan and points the finger clearly at former Maguindanano Governor, Andal Ampatuan Sr as the mastermind. The reason for the massacre? A political rival, Toto Mangudadatu, had dared to declare his candidacy in the 2010 election. The trial is continuing and a proper analysis should perhaps await the verdict.

At least, under President Aquino, there is a trial taking place. And that is progress.

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