The government remains confident economic growth targets will be met despite the declaration of emergency rule and the attendant political uncertainty, the National Economic and Development Authority (NEDA) on Thursday said. Increasing globalization, together with the growing "political numbness" of Filipinos, will ensure that the economy grows at a faster pace this year, NEDA director Dennis M. Arroyo declared. Unless a bloody revolt ensues in the coming weeks, economic growth -- as measured by gross domestic product (GDP) -- will meet the government’s reduced target of 5.7-6.3% for the entire year, Mr. Arroyo said. The original growth target was 6.3-7.3%, but the government decided to reduced it due to concerns about volatile oil prices, among others. An analyst said the government’s optimism may not be far-fetched but added that its targets are too optimistic. The lifting of Proclamation 1017 declaring the state of national emergency is also crucial. University of Asia and the Pacific (UA&P) economist Dr. Peter Lee U said "We all agree that these developments have an impact on the economy. We just don’t know by how much. But if these political issues would be resolved quickly, then it would not harm the economy that much." "Businessmen have already long expected these political uncertainties," he added. Mr. U, however, said the government’s GDP target is "overly optimistic." "We at the UA&P see economic growth to come in between 4.9% and 5% this year, due to high oil prices that would likely affect the expected rebound of our exports." The economy grew by 5.1% last year amid impeachment charges and calls for President Gloria Macapagal Arroyo -- no relation to the NEDA official -- to resign due to alleged poll fraud during the May 2004 elections. "If we (the government) would change the GDP targets this year, it might be due to other reasons, but definitely not the current political uncertainties," the NEDA’s Mr. Arroyo said. The President’s decision to place the entire country under a state of national emergency following a supposed coup attempt last Friday has sparked fresh concerns about the country’s chances of staying on the growth track. Mr. Arroyo said that with increasing globalization, the country’s economy relies less on internal issues to drive growth. "Our export partners still buy our products. They really would not care about what’s happening here as long as we deliver," he said. "The countries that hire our OFWs (overseas Filipino workers) would continue to employ Filipinos despite these political uncertainties," he added. While he expects the current political situation to "slightly" affect investor sentiment, Mr. Arroyo expects remittances from the more than eight million Filipinos abroad to continue to drive overall economic growth for this year. After remittances grew to a record $10.7 billion last year, dollar inflows from OFWs would grow by 10% this year, he added. The government is also counting on a rebound of merchandise exports this year to boost the economy. Mr. Arroyo said the NEDA remains confident that exports would grow by 10% this year from last year’s 3.9%. Continued investments in the business processing and outsourcing sector would also provide the needed jobs to keep the economy on track, he said. He said the boom in call centers and other outsourcing activities contributed to the impressive growth of the services sector last year. The sector, Mr. Arroyo added, kept the economy afloat amid record-high oil prices and weak demand for the country’s merchandise exports. The services sector grew by 6.3% in 2005. - J. O. Valisno/BusinessWorld Security chiefs set to propose lifting of PP 1017 Security officials are expected to recommend Friday the lifting of emergency rule if the relative peace noted since Monday continues to hold. Speaking at a briefing at the Palace, Defense Secretary Avelino J. Cruz, Jr. said he may recommend today, on behalf of the Defense department and the Armed Forces of the Philippines, that Proclamation 1017 be lifted. At the same briefing, Justice Secretary Raul M. Gonzalez said "the situation can already admit the possible lifting of the state of national emergency", while Philippine National Police Director-General Arturo C. Lomibao said they are confident that some measure of "domestic tranquility" has been restored since the weekend. Mrs. Arroyo has given the three until Saturday to submit their individual assessments of the security and peace and order situation, in response to calls from within and outside her Cabinet to end emergency rule. The three officials said they cannot say when Mrs. Arroyo will make an announcement, assuming they give their recommendations today, but noted that the President said she will lift the proclamation "as soon as possible." Finance Secretary Margarito B. Teves said the joint assessment by the economic managers and members of the security team will likely take place tonight if not Saturday as earlier scheduled Once the proclamation is lifted, Mr. Lomibao said the policemen stationed at opposition paper The Daily Tribune -- which was raided during the weekend -- will be pulled out. But the government will continue to monitor media content, Press Secretary Ignacio R. Bunye said. Mr. Lomibao also said investigations and the arrest of anti-government plotters will continue. The Armed Forces, Mr. Cruz said, will proceed with the prosecution of military personnel implicated in the plot to overthrow the government. Three officers have been relieved of their commands and placed under investigation: Scout Rangers commander Brig. Gen. Danilo Lim, Marines brigade commander Col. Ariel Querubin and police Special Action Force Chief Supt. Marcelino Franco. In the following days, Mr. Cruz added, the Armed Forces will reveal the names of junior officers recruited by the New People’s Army (NPA), to further bolster the government’s assertion that the communists were forming a tactical alliance with military adventurists. The only evidence the Armed Forces has shown of this alliance so far has been a reported meeting between two NPA members and escaped Magdalo leader Lt. Lawrence San Juan when he was recaptured in Batangas on February 21. Left-leaning party-list legislators and NPA leaders have also been charged with rebellion. Mr. Cruz said he will recommend the lifting of Proclamation 1017 because threats to national security coming from the Armed Forces "continue to recede and subside." Army commander Lt. Gen. Hermogenes Esperon reported to him, he said, that the Scout Rangers are all "accounted for" while Marine commandant Brig. Gen. Nelson Allaga has asserted he has "full control of the Marines." Mr. Lomibao said "the elite Special Action Force is now as solid as ever", while Mr. Gonzalez noted that "the plotters who sought to undermine and bring down the government have been thwarted ... many have been arrested and many are under tactical interrogation." Mr. Gonzalez added, "I am satisfied that a significant number of the plotters are exposed and the due process of the law will deal with them as we continue to monitor them." Messrs. Cruz, Gonzalez and Lomibao, however, said vigilance, coupled with intelligence work, will continue to be exercised since the lifting of Proclamation 1017 does not mean the threats against the government have been completely dispelled. Mr. Cruz said the government will continue to institute reforms in the Armed Forces to address the grievances of soldiers. "We will retrain, re-equip and re-man a total of 84 battalions in the next six years, and provide our soldiers on-base and off-base housing." He also asked politicians to leave the Armed Forces, especially the Marines, alone. "I reiterate my call to insulate the Armed Forces from politics, as the Constitution has provided." The Makati Business Club (MBC), meanwhile, yesterday called for the withdrawal of Proclamation 1017. The group, which last year called on President Gloria Macapagal-Arroyo to resign, yesterday said it is opposing all attempts to resolve the country’s political crisis through extra-constitutional means. Although it recognized the government’s right to protect itself, the group said it considers the proclamation as "excessive, dangerous and uncalled for." "We therefore call for the immediate withdrawal of the declaration of the state of national emergency," MBC said in a statement. The MBC, led by lawyer Ricardo J. Romulo, said the declaration is reminiscent of the proclamation of Martial Law in 1972. "The warrantless arrests, warnings and threats against media appear to be early indicators of a crackdown against voices of dissent," the group said. Although businessmen identified with the administration such as Philippine Chamber of Commerce and Industry President Donald G. Dee and Filipino-Chinese businessman Francis Chua said it’s business as usual, the MBC expressed a different view. "Those who welcome Proclamation 1017 should ponder the lessons of history. The Martial Law period resulted in great poverty, more insurgency and greater instability in spite of the surface stability that it proffered and initial growth it showed," the MBC said. The group said the government should instead address the issues which spawned the crisis, particularly allegations of election fraud against Mrs. Arroyo. - Judy T. Gulane with a report from Iris Cecilia C. Gonzales
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