No need to panic, says Monsod

Former Socio-Economic adviser Solita Monsod says there's nothing to panic about the current economic imbroglio we're in. " We've been through worst before when we had that crisis in 1974", says the UP economics professor and former TV host.

Well, tell that to US investors, Solita. Hundreds of investors are worried over what US Fed Reserve Chief Bernanke has for a followup. Yesterday, Bernanke painted a gloomy picture for the US economy. He says we have'nt seen the worst yet for the US economy. Analysts are predicting 150 banks to fall this year due to the worsening sub-prime crisis. Bernanke said the same thing and investors are hoping that his announcement either today or tomorrow would somewhat be better than the near-shattering one he unleashed yesterday.

A 5.2 growth rate, says Monsod, is nothing to be worried about. It just says that we'll have lower growth than other economies, say Singapore or Hongkong. What causes slower growth? “Government accounts for a lot of the weaknesses. We have now become much more open, but the bad news is that the corruption, the legal system, the weaknesses of our institutions are driving us down,” adds Monsod.

What's puzzling, says Monsod, is the fact that it did'nt alleviate poverty. In fact, the number of poor people even increased exponentially with that of economic growth.

I think Monsod is forgetting that these optimistic economic projections are just that--projections. What would happen to us should Bernanke announced a gloomier economic scenario for the US economy? Surely, that would make a very serious impact on our economy. And to think that, this early, analysts are saying that our equity investments will sorely be affected by the US sub-prime crisis.

So, there's no reason at all to panic, huh, Solita?