Manila: PGMA tells her economic team to counter negative effects on RP economy of failed U.S. bailout bid

Philippines: Economy

posted 1 Oct 2008

PGMA tells her economic team to counter negative effects on RP economy of failed U.S. bailout bid

Sep. 30 -- President Gloria Macapagal-Arroyo directed her economic managers today to come up with a concrete and comprehensive plan to counter the perceived “negative” effects that the failed US bailout will have on the country’s economy.

In a press conference this afternoon in Malacañang, Budget Secretary Rolando Andaya said members of the President’s economic team will meet later today to “see what the possible effects” will be of the failed US bailout on the Philippines, and what they can do to soften its impact on the economy.

Voting 228-to-205, the United States House of Representatives junked the proposed bailout plan, formally titled the Emergency Economic Stabilization Act of 2008, that would have allowed the Treasury Department to spend $700 billion to buy up toxic assets from struggling banks that have been reeling from the volatile financial crisis currently sweeping the world.

Andaya expressed concern over the non-passage of the bailout plan and its consequent effects on the country, but said the Philippines could weather this storm because our economy is “better prepared.”

This “preparedness” is borne out of the government’s implementation of tough economic measures that have shored up revenue collection and, thus, has provided the country with the means to somewhat soften the impact of this worldwide financial crisis.

These measures include the Expanded Value Added Tax (EVAT) which increased the VAT imposed on goods and services from 10 percent to 12 percent; and the Attrition Law that “forces” revenue-collecting agencies to meet their monthly targets or face penalties. (PE)