RP economic growth taking root in the countrysides--no thanks to Pnoy

I am amazed at the speed development has entered the countrysides. Many people are erecting malls and buildings with spaces to be leased. This just tells you of the enormous demands for commercial space. This means that Filipinos entrepreneurs are sprouting almost everywhere and businesses are expanding.

Now, wait a minute. Before anyone, and that includes Pnoy tries to get some credit for this, let me be blunt and say that this economic growth and expansion was not brought about by this administration. This is actually a fifteen year old thing in the making. It is now bearing fruits because of two things: slowdown of the economies of the US and Europe and the shift of wealth from West to East. Yes, hot money is beginning to re-enter the US economy but because investors have seen the condition of the Philippine countryside, and the enormous market this country has, some of these hot money are now parked here, in the banks. Liquidity allows banks to play, and play they will thru placements and of course, granting or giving of loans. The low interest rates given by the Bangko Sentral is pretty much encouraging people to get more loans. The more people entering into loans and investing these in profitable ventures, the more expansive this growth becomes.

The local bourse is performing very well, which means that people are actively reacting to market stimulus. Consumers are pretty much using their monies to buy things. The more people buy, and the more diverse their choices are, the more sustained this growth becomes.

Again, let me be very frank and say that this is NOT brought about by this administration. This is a natural consequence of the existing condition of the global financial system. Investors are seeing dollar signs in the Philippines. However, this has its time limits.

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?