It is a race between the economy and the debt


T saidit is necessary to increase the debt! The nature of the conversion is unthinkable – it would send the Philippine industry in the direction of Sri Lanka. The Philippine economy grew by 8.3% in 2022 Q1 but was helped by a slowdown in 2021 Q1 and a penalty in housing inflation. Punishment will be easier and the lowest base catapult will be lost for 2022 Q2 and beyond. We were lucky with 6% for the rest of the year. The Philippine financial system has a poor balance sheet with a debt of 63% (about P12 trillion) of GDP and a financial share of 8+% of GDP.

Dr. Vaughn Montes told the FEF conference on July 8 that only 18% of the debt is secured abroad and that is good news for the government. receiving training from local creditors. Strengthening our foreign stewardship (more than eight months of importation) was very pleasant, although it was understood to be somewhat declining. However, debt in foreign currency continues to grow, as G2G’s borrowing and borrowing from multilateral organizations provides a better environment for rollover and new currency.

I cannot say that the speed of debt growth is as difficult as the difficulty of the global economy to predict: the Russia-Ukraine war is prolonging and Russian oil continues to pull; In response to the increase in oil production, Russia will not be weakened by the oil price crisis. The fact is that we are now in a cheating game. However, an economic growth of 6-7% should be enough to cover more amazing things than debt.

Inflation had already reached 6% and the stock price broke to P56/$. We are in this situation in 2004-2005 with the political turmoil of Garci and the departure of Hyatt 10. The Bangko Sentral ng Pilipinas (BSP) is set to increase interest rates and pause to restore control. value because new exuberance will be seen on the demand side of the market. That’s why the BSP is reluctant to follow the US Fed’s model of interest rate hikes. Given that rapid economic growth is our goal, the BSP is reasonable. In addition, short -term inflation -led inflation has not been directly offset by high interest rates to dampen the economy.

Unlike 2016 when the government got money from its ears, the fiThe resources to support the Build, Build, Build (BBB) ​​project have dried up and so the holiday season will be understood. High taxes on a previously acquired polityffA sharp fall in income will lower demand in the market, in addition to inflicting real pain or improving living conditions. There is a growing voice for the transfer of the safety net due to the extreme lack of employment as a result of job losses and high food prices. That voice cannot be ignored because social problems can start from poverty.

As the economy grows, the question of how to accelerate investment becomes important. The iron law of economic growth without rapid investment goes first pfftt. The Philippines is more than a decade behind its neighbors in terms of investment – 20% of GDP vs. 35-40% of GDP. Even in the last 12 years of the last two presidencies, we have not broken down 25% of GDP. Government spending has improved from about 2.5% of GDP from 1980-2015 to 5-6% of GDP. Although the BBB is very interested. Now the BBB will rest.

How do we manage high investment costs without fail fisource of income?

1.) In order to develop the body, the industry needs to expand through public-private partnerships (PPP). PPP has previously provided rocks in arterial systems (Skyway 3, TPLEX, CALAX, and the Cebu and Clark Air Terminals, to name a few). But demand for PPP schemes among private players has declined due to an act of the previous administration: the refusal to honor the Singapore court’s decision to pay the bills. Metro Manila water concessionaires combined with the threat of seizure. The government could not be trusted to keep the agreements it had signed. Opening up new markets to foreign players is one thing (the new APC will do so), and that is one of the agreements concluded in those markets that will be honored by the authorities and the authorities. Meeting without the execution of the letter of the law.

1.a) Marcos ’new implementation is a good thing to signify an iron fist to the law: honor the agreements that have been signed;

1.b) Similarly, the rules applicable to the new PPP law should be revised to include a strong MAGA provision (material adverse government action) as a single sign of that commitment; a,

1.c) initiate the process of honoring the Singapore arbitral decision on water concessionaires. One of the reasons for this new investment is the direct investment community of foreigners. The Duterte government has reduced the law by increasing the income tax for PEZA (Philippine Economic Zone Authority) seekers from 17% (equivalent to the 5% gross income tax calculated by Treasury) 25% free of charge. PEZA investments have been declining since then.

2.) Perhaps for PEZA seekers, a 17% employment tax offer for 10 years (which is what the Vietnamese offer) is comforting.

3.) Raise investment demand by clearing fences and forests. Move $ 6-billion Tampakan Gold and Copper Mining in Bukidnon.

4.) Debt from local governments: roll over the responsibility to the local government by delaying the implementation of the Mandanas idea for five years with reasonable compensation; This requires the approval of the Supreme Court. This will delay for better times the inflation of the economy (3% of GDP growth on the DoF scale);

5.) Turn personal money into the agricultural industry by training (legally if necessary) the involvement of farmers to increase productivity by returning quantity.

6.) Explain the ecology pro-tradables.

7.) In order to save money and create more jobs, it should be encouraged through a heavy tax on unfinished buildings – while 20% of the house used will be spent. Is for the installation of solar PV. The good news: the Gokongwei company has expanded its shopping malls and shopping malls. Thank you.

Raul V. Fabella is a retired professor of the UP School of Economics, a member of the National Academy of Science and Technology and an honorary professor of the Asian Institute of Management. He gets his dopamine regulator from the car and cares for flowers with his wife Teena.

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