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Manila plans P100-B crisis fund

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By Joel Guinto
First Posted 13:22:00 10/22/2008

MANILA, Philippines – (UPDATE) President Gloria Macapagal-Arroyo said Wednesday she supported a plan to create a P100-billion fund to help insulate the economy from a recession in United States.

Arroyo said the fund, a proposal made by the Philippine Chamber of Commerce and Industry and to be financed by the government and private banks, would be used to bankroll education and infrastructure projects.

Arroyo said state-owned financial institutions, including Development Bank of the Philippines and pension fund Social Security System, have committed to contribute to the fund.

“We hope the private banking sector will join in this,” she told 34th Philippine Business Conference at the Manila Hotel Wednesday.

“That way, we can put our money in human capital formation which will provide direct income and services to the poor,” she said.

Arroyo cited her pro-poor initiatives, including conditional cash transfers, health insurance from PhilHealth, and scholarships, among others.

“That is why I welcome the proposal that was given to me by Donald [Dee]… We should have a P100-billion private-public fund, P50 billion from the GFIs [government financial institutions] and P50 billion from the private banks and financial
institutions,” she said.

“One thing is sure, we must not lose sight on the impact [of the world financial crisis] on the ordinary Filipino who bears the brunt of these market fluctuations. The global economic crisis as you witnessed is responsible for driving up the price of food, fuel, and rice in the Philippines and around the world,” she said.

Arroyo said that under the Comprehensive Integrated Investment Program (CIIP), which is funded with public and private funds and will run from 2008 to 2010, the transportation sector accounts for P755 billion of the P2 trillion total investments.

“We will promote greater participation by GFIs, GOCCs [government-owned or -controlled corporations], LGUs [local government units] and the private sector, you the private sector in our infrastructure project,” she said.

“But given the huge investment associated with transport projects, P755 billion, the government will increasingly tap the private sector in the development of priority projects under the BOT law,” she said.

Arroyo also announced a series of measures to cushion the impact of a possible US recession on the domestic economy, including those aimed at minimizing the impact on the remittances of Filipinos working overseas, a key engine of growth.

“So far, there has been no displacement of expatriates related to the financial crisis,” she said.

Arroyo also said the domestic economy has “shock absorbers,” including a strong banking system to help it weather the global economic turmoil.

The government is also confident its full-year budget deficit could be smaller than the targeted P75 billion or 0.5 percent of gross domestic product, Arroyo said.

“So far as of the end of September, it is P53.4 billion which we can extrapolate to P71.2 billion by the end of the year and privatizing Petron will provide additional headroom of P25.7 billion,” she said.

The government has offered to sell its 40-percent stake in oil refiner Petron Corp. to Ashmore Group PLC which already holds 50.57 percent of the company.

Interviewed after the President’s speech, Dee, special economic envoy, said that the SSS, of which he is a board member, the DBP, and the National Development Corp. have pledged P10 billion each.

Dee said two other GFIs would also pledge P10 billion each, but did not name them.

“The President is saying if it [US recession] happens. But what she’s saying is I’m not going to wait. I’m going to do it to make sure that the economy is sustained,” he said.

Asked if the P100-billion fund would be set up whether or not a recession happens in the US, Dee said: “Yes.”

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Written by joelguinto

WedUTC2008-10-22T09:11:54+00:00UTC10bUTCWed, 22 Oct 2008 09:11:54 +0000 22, 2006 at 12:45 am10

Posted in Uncategorized

One Response

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  1. Hi!
    My name is Jessika!


    FriUTC2008-12-12T21:35:14+00:00UTC12bUTCFri, 12 Dec 2008 21:35:14 +0000 22, 2006 at 12:45 pm12

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