#Throwback2014: Events that helped shape the PHL economy

Events that helped shape the economy this year ranged from the politically-colored Development Acceleration Program to a Manila City ordinance that helped worsen cargo congestion in the ports of Manila, to the US Fed move that ended a regime of easy money for fund managers. Here's how they impacted on Philippine financial markets and the economy in general.

SC: Certain DAP acts unconstitutional

In a decision on July 1, the Supreme Court (SC) struck certain acts under the Aquino administration's Disbursement Acceleration Program (DAP) as unconstitutional. DAP is a reform intervention that uses savings and unprogrammed funds to speed-up public spending. 

“The SC decision is crucial because it meant that the approach to accelerate [government] spending was not going to be effective,” Bank of the Philippine Islands lead economist Emilio Neri Jr. said.

The adverse effect of the decision was one of the reasons the Aquino administration cited for the economic slowdown to 5.3 percent in output terms during the third quarter. 



Manila port congestion

In February, the City of Manila imposed a daytime truck ban to ease traffic. Instead, the ban constricted the flow of cargo to and from the ports of Manila. 

It pushed inflation to 4.9 percent in July, the highest in nearly three years, and had a "chilling effect" that slowed consumer spending and weighed on Philippine output, Socioeconomic Secretary Arsenio Balisacan said. 

The truck ban may have actually pried opened a can of worms hounding the main seaports. It led to several investigations and the drafting of mid- and long-term solutions, Ateneo de Manila University Economics professor Alvin Ang said.

The Philippine Chamber of Commerce and Industry (PCCI), the main business organization in the country, said it pointed out a decade ago a port congestion waiting to happen with the expected economic boom.

The City of Manila eventually gave in and lifted the daytime truck ban mid-September as the national government, truckers, port operators and business groups blamed the city-wide ordinance for the port congestion.

Upgrades from S&P, Moody's

This year the Philippines garnered two credit rating upgrades from global debt watchers.

In May, Standard & Poor's Ratings Services raised its long-term sovereign credit ratings a notch above investment grade. 

Earlier this month, the Philippines secured another upgrade from Moody’s Investors Service. 

The upgrades were positive developments in attracting foreign investments, Philippine Stock Exchange president Hans Sicat said. "I think the good news for the Philippines is that we are getting, perhaps, a relatively good look from investors since we stack up extremely well against our ASEAN counterparts," he said.